Marriage is certainly one of the most exciting events of one’s life and it brings about a whole world of changes to one’s lifestyle.
However, apart from the social and personal implications that it carries, there is also a plethora of financial responsibilities that both partners have to now plan for their combined future. The first thing that couples should do after marriage is to check out their financial appetites, preferences and compatibility so that a common road-map can be chalked out for their joint future.
Legal process
There are certain legal processes which have serious implications on one’s financial status, which must be undertaken as soon a possible after tying the knot. Change of name: Certain social norms require that brides change either their first or last name after marriage. It is, therefore, essential that this change be updated in your financial records.
If you plan to keep your respective finances separate, then there is no harm in the bride retaining her maiden name. However, it must be consistent throughout.
Change of address: If you are planning to move out after marriage into a separate house, all banks and financial institutions that you are dealing with must be apprised of the new address.
Change of nominee: You need to change your nominee for bank accounts, shares, insurance policies and other investment products.
Change of will: If you had already made a will, the details of inheritance will have to be changed or else get a new will created to include your wife.
Family budget
Both partners have to sit down and chalk out a road-map by defining the exact earning potential, essential expenditure and setting common goals.
The financial aptitudes of both partners have to be considered in order to work out a middle path with balanced risks in the investment.
The responsibility of monitoring earnings, expenses and investments has to be divided among the partners so that a tight control is maintained.
If either partner has an outstanding loan, you can plan to repay from the combined funds so as to pay off the loan at the earliest. Some long-term as well high-cost financial goals, such as vacations abroad and purchase of a home and car, will necessitate a careful planning and disciplined implementation from the start.
These goals must be realistic and should help you even in case of unforeseen circumstances.
Insurance cover
After marriage, the financial responsibility of both partners will double in order to make the new home successful. Both of them have to get adequate insurance cover depending on their income and perceived financial goals in the absence of the other.
The existing insurance cover — preferably a term insurance — may require to be upgraded keeping in mind the dependence of another life on your income.
The couple will have to work out the amount that they spare for the premiums of the policy and compare it with their need for cover. The expert advice from financial planners can also be sought to get an accurate estimate of the requirements versus funds available.
Emergency corpus
The very nature of life is unpredictable. There may be several unforeseen contingencies requiring mo-ney such as the sudden loss of job, health problems, car repairs or a renovation of the house.
One may even have to cater to the health problems either of the partner’s parents at a short notice. While the need for emergency funds prior to marriage was limited solely to individual needs, post-marriage this must cater for combined needs.
Thus an emergency fund that is approximately six months worth of expected family expenses must be kept aside within easy and quick access.
The financial success of a family depends on the equal effort and team work from both husband and wife.
This would ensure financial stability and success over a long period of time. The couple has to invariably learn how to spend smartly and save a decent sum of money so as to achieve financial freedom and security at the earliest.
(The writer is the CEO of bankbazaar.com)