Whether your love-struck heart wants to believe it or not, The success of a love story depends on many things besides love. And the most important one, finds Ashwini Paralkar, is about managing finances.
A majority of would-be couples seldom have open discussions about their finances, present and future. Some never even get around to it at all. This could lead to a lot of friction in the relationship. The burden of unresolved monetary issues is just as likely to sour your relationship as will unresolved emotional issues between the two of you.
So have that much-postponed talk about the outstanding money issues at the earliest and reap not only monetary rewards and a peaceful, conflict-free monetary relationship, but also a long-lasting, equitable marriage that rests on the foundation of trust and respect. And, it is just a matter of following the basic ground rules.
Introduce yourself to earnings and assets/liabilities
Make your expectations clear to your spouse in the initial stages itself. Start with your earnings. Compare each partner’s earnings vis-à-vis his expenses. Discuss about each one's assets and liabilities, present and the probable ones in the future. Talk freely about supporting your parents, if required. Discuss exigencies around childbirth and other sabbaticals. Planning for these in advance could ease off the possible sore points in your marriage later on.
According to Anil Rego, CEO and Founder, Right Horizons, taking a frank approach in listing your
goals—like buying a house, how many kids you’d like to have, planning for their education as well as your own retirement—is crucial towards a healthy and financially sound marriage. It helps you decide the approach you need for your savings kitty.
No one likes to get bogged down by one’s partner’s debt. So aim to always pay off all your debts before getting hitched. If any long-term debts do exist, discuss those and plan towards how you can go about paying them off.
Manage your finances professionally
Think rationally and have a clear understanding of financial issues. Plan to manage finances in your marriage like you would manage a business or work set-up, and do not hesitate to seek advice from a professional, if the need arises.
Keeping financial secrets from each other before getting married is going to ruin your marriage sooner or later. Open up to your would-be spouse about any erratic spending patterns you may have observed.
Merge or keep it single
Whether to club the spouses’ finances or keep them separate is an ongoing debate among couples. “However, it is prudent to keep finances separate to a certain extent,” says finance expert Suresh Sadagopan. “Saving and spending should be done in proportion to the income earned by both the spouses. To cite an example, if the man and woman are earning in the ratio of 4:1 or vice-versa, it is wise for both of them to contribute to the household expenses in the ratio of their earnings. In fact, it is a good thing to open a joint family expense account and to achieve the best results, contribute as explained above. Your individual purchases can be made using your separate accounts.”
From “nearly weds” to “newly-weds”
*Plan for a contingency fund—Set aside funds equivalent to three months of your income to help you tide over unforeseen circumstances like a lost job, illness, and major house repairs. In fact, couples should make this their top priority in marriage, as it ensures some financial security in times of upheaval.
*Invest wisely—Take the requisite risk in accordance with your goal and forge ahead. Review your investments regularly, together.
*Keep your spending in check—You would be surprised by the amount of money that trickles out of your pockets by way of movie tickets, eating out, ATM withdrawals, etc. Come to a mutual decision about your daily, larger and extravagant spending. Make sure you are on an equal footing.
*Set realistic goals—Put your full effort in financial matters and work as a team. Be honest and realistic about your financial situation. Create a will, and pen down what your assets are and how you want them distributed.