In life, there are certain events that can create a huge gap in your finances, when not properly planned for. These events include getting married. When you know that you plan to get married, start planning for that special day so that you can afford everything related to the ceremony without your finances taking a strain. The fact is, life is expensive. But it can be manageable if you plan ahead.
To help you get started, we have put together some important tips to consider in your planning.
Determine how to pay for your wedding
Many couples take out loans to finance their big day. Taking out a loan means that you will go into marriage with wedding debt, and you don’t want that. Properly budget for your wedding and honeymoon ahead. Draw up a wedding list and estimate how much each item will cost, this will help you figure out how much you will have to pay towards your wedding. Once you know how much it will cost, you can then start looking at how you plan to pay for it. You can take out a savings plan, open a savings account, or start lay-buying the items on your list ahead of time.
In your planning, make sure that you consider your guests. If you have a small budget, trim your guest list to fit into your needs.
Establish your financial goals
As much as you’re a couple, you’re also separate individuals with different backgrounds, right? So, your needs and wants might differ. In such a case, it will be in both your best interest to have a tough conversation about finances. Find out what responsibilities you each have towards your families. Talk through your expectations and ensure that your goals align, if not, meet each other halfway in terms of planning. Your partners’ goals may include buying a home, starting a family, paying off debt, saving for retirement, or traveling. Discussing these goals as a couple and choosing which ones to focus on will help you work together. Building a future takes planning, sacrifice, and commitment, so you should both be on the same page.
If you and your partner have different goals, you’ll need to prioritise what’s important. Consider hiring a financial planner to analyse your finances and help you put together a plan. One of the important priorities for any couple should be an emergency savings plan.
Do a financial inventory
Always be transparent where finances are concerned. Even if you decide to keep your money separate. Each partner should do a complete inventory of their income, debt, retirement accounts, bank accounts, and assets that they are bringing into the marriage. This can help you both understand what you’re getting into when you say I do.
Knowing each other’s finances can help you create a budget, tackle debt, and pursue your financial goals. It is also important to factor in the issue of Black Tax, especially if you are your family’s breadwinner. Your responsibilities towards your family don’t suddenly go away once you get married, so include this in your inventory and make sure that your partner is fully aware of it.
Decide how to split financial responsibilities
If you are both working, it’s always good to split financial responsibilities like bills, savings, and everyday purchases. If one spouse is the sole breadwinner, they will likely be responsible for the expenses. If you and your spouse earn roughly the same salary, you may split your expenses down the middle. Alternatively, you could contribute a proportional amount of money to the household based on your incomes.
“My husband takes care of the bond, maintenance, and school fees while I ensure that my family is fed. Doing this, allows us to save for emergencies. Back when I used to be a stay home wife, when we had an emergency we would take a loan but now that I work and help out, we can save for emergencies,” says Thandi Ntshangase who has been married for 25 years now.
It’s different strokes for different folks, right. So, tailor this according to you and your partner’s comfort level.
Should you open joint accounts?
Sharing bank accounts and credit cards is easier in many ways. You are both able to access money whenever you need to without the admin of having to move the money around. This also makes it easier to track spending and see if you can minimise it, should there be a need to.
However, joint accounts do have a downside, especially if one of you is drowning in debt. According to Policy Genius, it’s recommended to consolidate finances and assets as it helps spouses move forward as a team. It also helps avoid surprise assets, debts, and incomes when a spouse hasn’t been completely truthful.
Should you maintain separate accounts?
Having separate accounts allows a couple to individually maintain their financial independence and manage their own money. This can be a viable option if your partner has a different financial literacy to yours and if you both wish to keep a level of financial autonomy.
The downside to having a separate account is the admin of moving finances around. This is where the importance of splitting bills comes in
Create a budget
A budget is important for many reasons, one of which includes knowing what and who you are committing to. A well-defined budget is critical for success. If you and your partner live together, you may already have one. If you’re moving in together after you get married, you will need to establish one. Either way, work on creating and constantly revisiting as the years progresses.
In your budget, ensure include all of the necessary expenses such as bills, rent (or bond), savings, children’s education, etc. Always maintain open communication and transparency where finances are concerned, this will ensure that you budget knowing exactly how much you both have and also filtering other responsibilities in.
Plan to discuss your finances regularly. While talking about money isn’t always easy, it’s the best way to ensure that you continue to work together for common goals and the financial health of the marriage.
Discuss life insurance, funeral policies, and retirement annuity
These things may seem morbid but when you love your partner, you need to ensure that they remain comfortable even after you pass on. Discuss policies, take out life insurance for risk factors, funeral policy to make sure you get a decent funeral on your passing, and also consider retirement annuity. “I recommend a joint policy as it’s cheaper than each spouse having one. One benefit is that you can add a paid-up at death benefit so if you as the owner passed away, the remaining participants will still enjoy cover without having to pay premiums,” says Lyndall Adonis, a Metropolitan GetUp Financial Coach.
Life insurance is a crucial safety net for married couples. It protects spouses and children from financial disaster in the event of a death. Compare life insurance plans to find the policy that fits your needs.
