Invest in Credit Risk Mutual Fund or not?

When you get married, your life changes, quite literally! This is not just related socially, emotionally, and physically but also financially. You are no longer the single human being who can be irresponsible with anything, especially the finances. Couples usually tend to overlook the money matters and end up burdened with the mismanagement of finance by either of the partners. Marriages are said to be made in heaven, the expenses related to the same have to be borne on the earth. Recently, Delhi High court too said that in cases of matrimonial disputes both spouses would have to submit a detailed affidavit listing their income, expenditure to fix maintenance, permanent alimony, and right in joint property. So, here are a few tips that will ensure you and your partner lead a financially blissful life.

Assess each other’s existing finances

To ensure you are not in for a rude shock when you come to know about your partner’s financial habits, it is best to openly speak about the money matters before you walk down the aisle. This will help you understand if your partner holds any existing loan or credit card overdue payments; it will also help you get an idea of the existing investments. If the partner is in a debt situation, then openly talk about how he/she plans to repay the loan. Ideally, loan repayment and credit card debt clearance should be your priority.

Bank account details

Getting married does not mean that you can no longer have the right to manage your finances alone. You can have sole ownership of the money you hold and can open a joint account with your partner to take care of daily expenses or make joint investments in property. Opening a joint account will help you keep track of each other’s finances and make it easy for both of you to jointly share the responsibility of the house. Decide on opening the joint account before marriage to avoid financial clashes in the future.

Figure out each other’s financial goals

Before you tie the knot, you and your partner must be aware of each other’s financial goals. This is important as it will help you understand the direction in which the finances of your partner are heading and if you can contribute towards it or not. For instance, if your partner plans to buy a house in the next 5 years and you desire to go on a trip to Europe in the next 7 years. Keep each other informed to ensure both of you are on the same page and can allocate your finances accordingly.

Set up an emergency fund

Another prerequisite to meet before you plan marriage is that you have an emergency fund. The money in the fund can be used to take care of various financial emergencies like unemployment, hospital bills, accident, and other events that can land you in financial trouble. You must have at least 6 months of your savings stocked up in your emergency fund.

Figure out the investment avenue

One of the common questions that most married couples have today is where they should invest. Depending on the investment horizon, risk and goals, couples can look to invest in avenues like PPF, mutual funds, insurance, and other investments. However, this has to be done keeping in mind the risk appetite of both the partners. For instance, buying a TV or any other electronic item can be a short-term goal, buying a car or a house, planning for retirement or child’s marriage can be a long-term goal. Depending on the term of your goal, your income, risk-taking capacity, plan your investments. While recurring deposits, fixed deposits can be considered a safe investment option; you can also look to invest in equities, which are likely to offer you better returns in the long run in comparison to other investment options.

Decide who will handle the finances

If you both are earning then you can decide on who will handle what expenses. For instance, you can manage household expenses and your partner can handle loan EMI payments or vice versa. Also, if your partner is the only earning member then you can decide on how the expenses will be handled and if you will have any say in it or not. It is necessary to have a chat regarding this to avoid any hassles in the future.

Invest in a term insurance plan

A term insurance plan is a type of life insurance plan that offers you financial coverage for a fixed period of time. This type of plan offers you high coverage at a low premium. In case of the death of the policyholder anytime during the tenure of the plan, the insurance company pays out the death benefit to the nominee. For instance, a term insurance plan of 1 crore for a 25-year-old, a smoking male would cost a premium of just Rs. 930/- per month.

Buy health insurance

Even if you and your partner have employer-provided health insurance, you must buy a separate health insurance policy. This is because if you or the partner quits the job, the health coverage is no longer provided and the employment coverage won’t be sufficient. Due to the rising health care costs and inflation, you must buy a health insurance policy. Buying a family floater health insurance plan offers coverage to you, your parents, spouse as well as your children.

The above tips will ensure that you don’t and your spouse doesn’t get into any matrimonial dispute due to financial issues. Remember, except for love and respect towards each other, financial planning is also an important aspect without which you won’t be able to live happily ever after with your partner. You can consult a good financial planner who can help you build a healthy and safe financial future and also achieve your financial dreams in no time.

(The author is founder of Money Mantra. Views expressed are personal.)