Today is a very important day for young couples all over the World. Yes, February 14th is known as Valentine’s day. Today is the day you send cards, flowers and lovely chocolate boxes to your loved one, filled with messages of love. You can even gift a smart phone to your beloved, so that he/she stays connected with you throughout this great day and on all days. Your beloved loves gold? Then perhaps a pair of gold earings ….
Girls, you must be wondering what to gift your beloved this Valentine’s day. How about a strong leather wallet or a nice watch or the T-shirt of his favorite football team….How about a mug which says “You are the only one I’ll always love”.
You must be wondering why February 14th is called Valentine’s day. This day gets its name from St Valentine, a priest from Rome who lived in the 3rd century AD. Emperor Claudius II banned marriages, because he believed married men made bad soldiers. Valentine felt this was not fair. He arranged marriages in secret. When Claudius found out, Valentine was thrown in jail and sentenced to death. In jail Valentine fell in love with the jailer’s daughter. When Valentine was taken to be killed on February 14th, he sent his beloved a love letter signed “From your Valentine”. This day became Valentine’s day.
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Valentine’s day is a great day to gift your loved one chocolates, roses and gifts. It is also a great day to discuss something far more important….Money. The biggest secret couples hide from each other is debt or what is commonly called loans.
If you have many loans to repay, it takes a lot of courage to tell your beloved whom you soon plan to marry, about these loans. You have a car loan, home loan and a personal loan which you are struggling to repay? Well it sounds tempting not to mention these loans to your beloved? What if she gets angry and leaves you? Yes, the coward’s approach of running away from problems, seems the best way out. But, imagine when you’re married and she finds out. How would you then face her?
The right approach is to gather courage and discuss this situation, with your future wife. Tell her about these loans. Many women are naturally very good managers of money. I know a similar case where a friend’s wife had suggested a joint bank account. A joint bank account is a shared account (usually between husband and wife), where each member can withdraw or deposit money in this account. Both my friend and his wife deposited their salaries into this account.
Their first priority…Ensure that all loan EMI’s were paid in time. EMI’s were paid within a day of the salaries being credited. Soon their loans were repaid.
This is a very important discussion and what better time to discuss it, than on Valentine’s Day. This is a time to discuss your sources of income (salary or house given on rent and so on), your future financial goals, your investments and your savings.
The first step….Make a budget so that you understand where your money comes from and where it goes. Your budget should include every spend, no matter how small or how insignificant it seems. Remember this saying “A small leak can sink a great ship”. If you don’t pay attention to small insignificant spends, these spends will soon sink your budget.
You need to create an emergency fund, where you keep money for an emergency. If you are married, you must have at least 6 months worth of monthly expenses, kept aside in this account. If you are unmarried, this is 3 months worth of monthly expenses. This money must be used only for financial emergencies.
Your partner might be a very aggressive investor who loves to invest in equity mutual funds or stocks. If he understands the risk involved in this investment and you are fine with it, then there’s no problem. It’s best to understand your beloved’s investment style before you get married. Remember: An investment in equity gives high returns but at high risk.
You might be a conservative investor who loves to invest in fixed deposits and recurring deposits. It’s best for you stick to your investment style which gives assured returns, while your partner continues to invest in equity mutual funds.
Plan to marry your beloved soon? Why don’t you show her how responsible you can be by availing a term life insurance plan? A term life insurance plan is nothing but a life insurance plan, where you pay a premium for a fixed time period. If something happens to you within this period, your beloved (nominee) will get the death benefits (sum assured) from the life insurer.
This money will help her enjoy a quality life even in your absence. If you have loans to repay, then you must avail a term life insurance plan. It would be terrible if you leave behind loans for your beloved to repay.
Remember: You/Nominees get nothing if you survive the term of the plan.
It would be great if you involve your beloved, while you make financial decisions. Your partner will guide and help you achieve financial goals, as you journey life’s twisted and turning paths. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.