Many singles have an array of questions regarding their dreams and goals and how they would fulfill them,now that they would be getting married.
These questions whether you may realise it or not,are very important to ones financial life. A few years ago when Satya (name changed) came to me and announced that he was getting married,he had a host of questions. After listening to him,I realised that before me giving him a set of answers,he needs to ask himself the same questions. When I told him this,he asked me,wouldnt it be easier just to ask my partner the questions and then decide my stance. While he has a valid point,knowing where you stand in your financial dreams is as important as knowing your partners dreams.
Now,here starts the conundrum: Like Satya,most people do not know what to ask themselves. Is it only about financial goals? Or just about how to achieve them? Questions are many,however,having the answer to some of them will and can help you decide on your financial future.
Heres what you can ask yourself:
Do I want joint or separate savings account?
Since you are getting married,it is important to ask yourself if you and your spouse would keep all your savings in a joint or a separate account. When I asked Satya,he questioned me if it was really important to know. This is often a tricky case for young couples especially when it comes to jointly dealing with expenses after a period of being unaccountable to anyone for money.
Will debt be shared?
Though we live in a society that believes in joh mera,woh tera (what is mine is yours),this standpoint changes when debt comes in the picture. Before you ask your partner if he/ she is ready to share debt,ask yourself if you are financially ready or able to take on someone elses expense in your account. If you choose to do so,you will have to re-align not only your investments but also figure out how this will affect your short term dreams and goals.
How do we view liabilities?
For some,liabilities are okay. For some,it is a big no. Of course there will be people taking the middle path. This can stem from our money personalities,our upbringing and our belief systems on money matters. If both the partners do not agree on this (among the many other things) they might never be able to take decisions in future when it comes to purchasing another house for investment purpose,to buy a car on loan,to take an education loan for children while investing for retirement etc. It would be good to talk about this and understand each person’s take on borrowing money.
Is it your goal,my goal or our goal?
There is an extremely high possibility that you and your partner are investing to fulfill a common goal. Whatever it may be,you have to be sure if you are willing to combine the same and realise this dream at the same time frame. If you feel that it would be good idea to do so,first understand how this affects your existing plan. If it will push you ahead and help you realise your goal without too many hiccups,then ask your partner if he/ she is willing to.
On the other hand,also understand that there might be some negative connotations to changing your existing plan,as you may have to face a penalty in case of dissolution of a tool. The pros and cons of the situation will be best explained to you by your financial planner.
What is your investment outlook?
Are you a conservative investor or an aggressive one? Or are you a moderate investor? Understanding your investment methodologies helps you to know what your investment style is. While people might adopt different views towards investments at different stages in life,to align your finances with your partners determine your outlook towards investments and how much you are willing to forego today to ensure that you can meet your investment targets.
Do I need to re-work on my will?
Before you get married,you should decide if you need to rework on your will,in case you already have an existing one. Though this is not a split second decision,you need to be at least sure if you are willing to make the change. Also consider nominations for your estate.
In case of a second marriage,you need to comprehend how your existing will affects your children from your first marriage and how you would alter it to accommodate your new family members.
Once you have some ideas of your financial life clear in your mind,having an open discussion with your partner will be easy. After all,marriage is not just a union of two people; it is also the union of dreams.
Author is CEO,Freedom Financial Planners