Marriages can’t survive on just love. You require trust, joint money management, income contributions and mutual understanding to make marriages last. Regularly discussing your financial and investment goals with your partner can help you significantly in improving your family’s financial life.
So, if you got married recently or are planning to tie the knot soon, following are some effective money management tips that you must definitely put to use:
Openly discuss your financial targets – Talking openly about money with your spouse can help you plan your finances better. Please don’t be surprised if your partner differs significantly from you in terms of his/her spending and saving habits. There’s always a middle way.
Create a budget – Making a budget together is the first step you must take with your spouse, in order to create a financially independent family. Categorise your debts based on their interest rates and devise a budget plan that not just helps you allocate funds (for paying back your debts), but also assists you effectively in meeting your day-to-day expenses.
Avoid using credit cards – If either of you loves shopping or is a shopaholic, ensure that both of you make a comprehensive checklist prior to entering any shopping mall. Never pay with credit cards unless you’re buying something really expensive. Spending frequently with credits card can bring you under a pile of debt in no time.
Divide responsibilities – Your annual household income will determine your standard of living. You must use your money management skills jointly in order to create a financially happy family. It’s important to equally divide the family’s financial responsibilities. While one of you can take care of loan payments, the other one can shoulder the responsibility of day-to-day home expenses.
Start building an emergency fund – You must discuss with your spouse and create a comprehensive plan for building an emergency fund for the family. Ideally, both of you should have at least six months’ worth of your regular expenses in such emergency fund.
Start saving for retirement – It cannot be denied that having a respectable monthly income is any day more satisfactory than receiving a measly pension amount each month. Researchers have found that people need at least 70% of their preretirement savings for sustaining their standard of living during their retirement years. Unless you work along with your partner in creation of a sound retirement plan for both of you, you may both end up withdrawing every last penny of your retirement savings owing to lack of clarity in this department.
Honesty is the best policy – Whatever you do, never lie about money matters to your partner. Doing so can lead to major misunderstandings and irreparable damages to the relationship. Even if you purchase something that’s unnecessary or exorbitantly priced, don’t refrain from telling your partner about such indulgences. The honesty of both the partners can go a long way in creating mutual respect, understanding and a solid bond of trust in the relationship.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.