Practical Steps For Couples To Manage Finances
By - IndianMoney.com Research Team 16 January 2016
Your big day is here. You have waited so long for it. You are getting married. Marriage is not a bed of roses. You need money to lead a good married life. Marriage is all about sharing and caring. You and your spouse must join together and make a plan to manage finances. You and your spouse must set joint financial goals and strive to achieve them. Involve your spouse in financial decision making. In a marriage you make all decisions together. Why should financial decision making be an exception?
Have an open financial discussion with your spouse
Having an open financial discussion with your spouse, is the first step in managing finances. You might tend to overspend on fancy clothes, shoes and electronic items. You over use your credit cards to purchase items, you don’t really need. Let your spouse know about it.
If you don’t reveal your overspending habits and fall in the debt trap, you would have to tell financial lies to your spouse. Financial cheating of a spouse, can put your marriage at risk. In Western countries financial infidelity, can lead to a divorce. In India a marriage is likely to survive financial infidelity.You and spouse need to know each other financially, so that you can set joint financial goals.
Make a Joint Bank Account
You and your spouse need to decide, whether you will make a joint bank account for all your expenses, savings and investments. You and your spouse could have separate personal bank accounts and a joint bank account to manage the family expenses.
You need to be careful when opening a joint bank account. Make sure you and your partner contribute money to the joint bank account as promised. If one of you does not make the contributions regularly, it could lead to a marital dispute.
You need to save for an emergency
Calamities strike without warning. The floods in Chennai a couple of months ago are still fresh in your mind. You or your wife might suffer a medical emergency, which needs costly hospitalization. You or your spouse could lose your job.
You need to set aside money in an emergency fund, to cater to such emergencies. You and your spouse must have at least 6 months worth of living expenses, kept aside in the emergency fund.
Set joint financial goals
Financial goals can be short term, medium term or long term. Going on a foreign trip can be a short term financial goal. Buying a car can be a medium term financial goal. Planning for retirement is a long term financial goal.
If you and your spouse both work (double income family), you can set large financial goals. You can get to these financial goals in no time.
Avail life and health Insurance
You need to avail a term life insurance plan to protect your spouse, in case of your untimely demise. You pay a premium to avail a term life insurance plan for a fixed tenure. In case of your untimely demise within the term of the plan, your spouse gets the sum assured (death benefits) from the plan. If you survive the term of the plan, you and your spouse get nothing. This makes term life insurance a pure protection plan. Your spouse can have a good quality of life, even in your absence.
You and your spouse must avail a family floater health insurance plan, with a critical illness rider. If you or your spouse fall ill and are hospitalized, your medical bills are reimbursed up to the sum assured in the health plan.Critical illnesses such as heart attack or kidney failure can empty your pockets. You or your spouse could suffer a critical illness such as a heart attack. If you have a family floater health insurance plan with a critical illness rider, then the medical bills are taken care of. This can save you from financial catastrophe.
So enjoy your married life but pay attention to your financial goals.
Under : Financial Planning