Plan well to avoid debt trap; don’t marry errors

Couple must clarify life goals and financial aims right at the onset of their marriage.

Update: 2014-01-12 12:12 GMT

Marriage changes an individual's life in many ways, bringing a lot of joy, additional responsibilities and worries in small measures as we try to adjust to the new person in our lives. After marriage, both of you might be working or either one of you. This will determine your income. Expenses are based on the standard of living. 

There are a lot of things that a couple must clarify right at the onset of their marriage such as life goals and financial aims. In fact, keeping in mind the rate of inflation, it is sensible to start planning for children’s education, marriage and retirement from the first day of marriage.
 
Managing Money
 
People begin any serious investments such as gold or property only after marriage. Money management takes serious undertones as family planning also enters the picture. Many couples make the mistake of paying greater importance to either money management or family planning:?both must be managed simultaneously. 
 
Expenses towards children begin right from their birth, schooling to their higher studies. There is an argument both for and against starting a family early in life. 
 
Starting early would ensure that you will be through with all the major responsibilities by the time you retire, while postponing it would ensure you have greater financial stability before you take on the responsibility of a child.
 
Changing Precepts
 
Contrary to the old times, when most weddings went unregistered, urban marriages are registered formally. There are numerous legal rights and obligations that come into action once a marriage has been legally formalised. There are a few age-old precepts which hold true even today such as:
 
  • Have at least one joint bank account. This is helpful especially when you are making investments or taking a loan jointly.
 
  • Apply for home loans jointly, as the chances of sanction rise. If both the partners are working, both can enjoy tax concessions.
 
  • Register all real estate property in both your names for administrative as well as loan purposes.
 
  • Change the wife's name on all legal documents including bank accounts, PAN card, passport etc.
 
  • Have a budget to keep track of your monthly expenses.
 
For the newly weds
 
As in the case of all personal financial planning, it is essential to have a short-term, medium-term and long-term financial plans, which can be used as a definite plan or as a yardstick by which you can measure your financial success. It will also keep a tab on the roadmap you have set for achieving your joint goals. 
 
These goals may be further categorised into needs and wants to mark their importance. The table above is an example of general financial goals. 
 
(The writer is CEO of BankBazaar.com)

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