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Cardinal rules of loan taking

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by: No more debt !
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Date: Sun, 17 Jul 2016 Time: 8:59 PM

Getting married is like entering a whirlpool with your eyes open. All that whirlwind activity and swirling groups of faces starts to make sense only after a few months. But what also starts to sink in is the fact that the dynamics of your life have changed, starting from your finances. Planning Finances for newlyweds, contrary to belief can be as romantic as falling in love.

Take note

Once you get married, existing expenses will change, there will be newer expenses. But then there will also be more sources of income. Here there are various questions you will have to answer:

  • What are the new expenses?
  • How long will both of you work?
  • Who pays for what?
  • Do you combine bank accounts?
  • Should your health insurance be a floater?

One thing you take note of is that your expenses in the first few months post marriage will shoot up sharply. Blame the wedding expenses, that exotic honeymoon, hosting dinner parties, return gifts, etc.

Same, same but different

If both of continue working you will have two separate tax entities. Hence it makes sense to maintain separate entities with your investments too. You can own certain assets jointly, but the tax-saving investments should be bifurcated. This makes goal planning easier. You can maintain a joint account to fund household expenses and predetermine who contributes how much, to that account.

For years to come

This is the most important part. List down the various milestones and goals you wish to achieve in the future- both individual and joint. This includes buying a house, planning for children and their needs, owning a car, and saving for retirement. Plot them all on a timeline and determine how much you need to save to fulfill each of the goals. Once you know the amount decide who will contribute how much towards that goal and when you should start saving for each of them.

Special occasions

If you plan to have kids, you will have to account for maternity time, which may be unpaid thus impacting the income in the house. You will also have to take into account pre and post pregnancy expenses. This consideration is very important especially if you are planning to take a home loan. Since the mother may not be able to resume work immediately it will affect your long-term income and goals.

Seal it with a sign

Now that you have your financial goals underway, you will need bank accounts, Demat accounts, insurances and sundry paper work. And that will demand marriage certificate, change in surname, change in marital status, and change in the name of nominee (wherever applicable). So get all the initial documentation out of the way within the first six months of your marriage.

Financial Plan needs to be implemented with speed, or else it loses steam and gets delayed

A Financial Plan needs to be implemented with speed, or else it loses steam and gets delayed.

Just like your relationship your finance too needs attention and nurturing. Make sure you keep an eye on your account statements, returns etc. Fix a day in the year to conduct an internal audit. Revisit your and keep it in sync with any changes in your ideas, aspirations, income, expenses and tax regulations.

About the Author

Chintan Jain

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