Got married recently? Here’s how to get your finances on track

The wedding is over, you’re back from the honeymoon, and it’s time to settle into your new life. To get it right, here are some financial considerations you should keep in mind

Got married recently? Here’s how to get your finances on track

Tied the knot recently? Congratulations! This beautiful milestone in life will ensure that you take on the future with someone by your side at all times. The planning leading up to your wedding would no doubt have been hectic, but now it’s time for you and your partner to settle into a new routine. 

While you do that, here’s an important financial checklist you must go through to ensure that you both are a ‘power couple’ when it comes to money matters. A solid financial foundation and collaborative financial planning is the best way to start this new chapter of your life. 

While it may not seem too critical right now, here’s a statistic that might be an eye-opener: research shows that 70% of couples fight and argue about money more than anything else.[1] This means money tends to be more problematic for couples than any other issue.

But then, there’s the 30% who have clearly managed to figure things out. Well, so can you and your partner! Do the following to ensure that you’re on the favourable side of this statistic.

Related: 5 Reasons to buy insurance if you are getting married this year 

1. Start talking about money 

Before anything else, start talking about money with intent and honesty. After the honeymoon, you and your partner might have an idea of each other’s spending habits, money management, and incomes. However, it’s important to sit down together and discuss these things in detail with the numbers on hand, and decide how you’re going to manage money as a married couple.

2. Consolidate assets and liabilities 

Once you’re both on the same page and prepared to start planning financially together, put down your monthly income, spends, and savings individually as you would have been doing before marriage. This should include investments such as mutual funds, property, fixed deposits, gold, etc. Make sure you include any debit you or your partner may have, such as education loan, credit card bills, etc.

Once all this is done, it would be a good time to talk about how you want to tackle spending and saving as a couple. This is a deeply personal choice and no matter which way you go, the only thing you have to make sure is that both parties are happy with it and neither feels resentful. You can decide to contribute a percentage of each of your salaries (say 30%) for household expenses. Do the same for investments and debt payments. The percentage approach works best since your salaries may not be the same, and neither partner should feel burdened. 

Related: Financial planning before important milestones: Marriage

3. Manage spendings together 

An important thing to consider is how you want to manage bank accounts. Joint bank accounts have quite a few advantages, as do individual accounts. You can opt for both, but be clear how you’re going to allocate the money, and which accounts you’re going to use for what payments. 

For instance, each partner can put in a monthly contribution for household expenses, investments, EMIs, etc. in the joint account and use that to make payments for the same. Your individual bank accounts can be for your personal expenses. This will provide a sense of independence and control for both, which will go a long way in ensuring a healthy relationship. 

4. Make a budget together 

Making a budget together and reviewing it periodically will ensure that you act upon all the conversations you have about money. When you do this, you should also expect surprises and not indulge in blame games. There are bound to be times when either of you make an unplanned purchase. That’s just how life is. As long as there’s no judgement or blame, both of you will feel encouraged to talk honestly about these hiccups instead of trying to hide them. 

Research shows that when couples fight about money, 21% do so because of deceit and lying, while 11% do so because they feel excluded from financial decisions.[2] It’s therefore important to be clear about what your non-negotiable spends are, so you don’t feel the need to lie. This way, you can both find a way to make space for such discretionary expenses in your budget.

5. Port health insurance 

Chances are that you and your spouse already have one of the following or a combination of the same:

  • Individual health insurance policy
  • Employer-provided health insurance
  • Family floater insurance policy for parents

In such a situation, it becomes important to review both your health insurance policies and compare their benefits, waiting periods, NCB (no-claim bonus), add-ons, etc. and decide which one of you should port your health insurance and be included in the other’s policy. Of course, you can continue to have individual health insurance policies too, if that’s what you want.

It is important to review your existing health insurance policies before making this decision. While doing this, you should also ensure that your health insurance policy has maternity benefits. Even if you aren’t planning on having a child soon, it’s better to have that cover since the waiting period is usually 3–4 years. 

Related: Financial freedom means different things for men and women. Here’s how.

6. Discuss the lifestyle you want

It’s important to evaluate your current lifestyle and discuss the one you wish to have in the future. This would also be strongly tied to your and your partner’s life goals. Talk over matters such as which city you want to live in, when you want to retire, whether you wish to emigrate to another country, if you want to have kids (and how many), if either of you hopes to start your own business at some point, and other such important issues. 

Depending on the answers, you and your partner can save and invest accordingly and have an effective financial plan in place. It’s completely normal if the two of you disagree in a few areas. For instance, a study shows that 38% of couples who haven’t retired yet tend to disagree on the kind of lifestyle they expect to have in their twilight years.[3] So it becomes all the more important to discuss and  decide on such things well in advance, so there aren’t any surprises or disappointments later.

7. Assign specific roles

Each person has a different set of skills, strengths, and weaknesses, and you can use that to your advantage. You and your partner should assign specific roles and tasks to each other based on your skills and preferences. If your partner is good with numbers, they can be the one to track all investments and do the tax planning. If you’re the efficient one who likes to get things done well and on time, you can be the one who makes all the bill payments and EMIs. 

When you assign specific roles, there will be no ambiguity as to who does what and when. It also means tasks will be shared, so one person won’t have to shoulder all the responsibility. This will reduce the number of conversations you need to have about the same things, build accountability, and enhance trust. 

8. Create an emergency fund 

Irrespective of the life stage you’re at, having an emergency fund is a financial basic. Now, as a married couple, your responsibilities and expenses may have increased; and hence, so must your emergency fund. Build an emergency fund with your partner that can comfortably cover 9–12 months of living expenses and financial obligations. 

The point of having this emergency fund is not to make an investment but to have it accessible when you most need it. So, you should ensure that it remains liquid. This means either stashing that money in a high interest-earning savings account, a fixed deposit, or a liquid mutual fund. Whatever you choose, make sure that this money is easily accessible to both of you. 

All the things listed above are essential, but implementing them can take time. It may take a few months or even the entire first year of your marriage to figure things out and get your finances in place. But if you both are patient and consistent, you and your partner will have a solid financial foundation that won’t just take care of your financial future, but also help your marriage to stay strong and endure the vicissitudes of life. Here are some smart ways couples can save on income tax.

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