You are getting married soon and want to lead a successful life with respect to finances. Setting up a financial plan beforehand works better for both partners in the long run. Not many people would approve of it, but practicality lies in the fact that both partners discuss their short term and long term financial goals in advance. Clear financial goals lead to better lives later because people are so busy living the relationship in their early days of marriage that they do not want to look at his crucial aspect of married life.
1. Count What You Have Financially
Both earning partners would have something in their respective bank accounts other than what they intend to spend at the wedding. Besides the money in bank accounts, count all worthy items each of you own, like, jewels, property, saving certificates, shares, bonds, etc. Assess your financial worth keeping in view two things; one, your sources of income, and two, your long term investments. Never build you financial independence on the basis of market shares since these are subject to market volatility. Now that your financial stance is clearly in front of your partner, you can decide upon the major financial decisions with them, for example the next financial move keeping in view the longer term goals.
2. Do Not Divide Living Expenses between Yourselves
Many people find it easier to run their households on the basis of income earning potential of each partner. This sounds alright, but practically it might not be. There have been instances when marriages have failed only due to financial discrepancies. Dividing household income amongst yourselves creates issues because each partner has their own needs and everything has a price tag. If there is a staggering difference in the salaries of the two partners, then it is not advisable to split the ratio into two halves because the one with the lower income will be left with a meager sum of money.
3. Never Create a Joint Bank/Credit Card Account
Never make this choice unless very necessary. No matter how high your partner’s monthly income maybe, if s/he has a bad credit history, it is better not to make them joint account holders. Bear this in mind, that if your partner is poor with financial decisions, then it can difficult for you to get a better credit score. In order to resolve this issue, sit down with your spouse and discuss about utility bills, grocery bills, interest on savings account, auto insurance premiums, auto loan payments, etc.
4. Make Your Goals Clear to Each Other
Just as mentioned in number 2 above, both partners have their own needs and everything has a cost. It might be that your partner intends to go back to school and finish a degree, which is definitely going to cost them a huge proportion of their salary. Similarly, it might be that one of you wants to setup a business and needs to save more for some time.
However, let your partner steer clear of the fact if you intend to switch career since it can have an impact on the amount of salary you are currently withdrawing. This means that discussing each other’s goals and financial needs will help you lead a prosperous married life.
5. Do Not Make Temptations Your Necessities
Though you have savings in your account, this does not give you an upper hand to spend as much as you want. There could be times when you would partake in spending in luxurious items. There are many things that we buy just because we fall into their temptations like a new laptop, LCD TV, designer furniture items etc.
Since you will shop impulsively every now and then, this can prevent you from saving more and leading financial independent lives later on. For example, credit card debt relief is very important later in life when you will need to pay for your children’s expenses too.
Just because you both earn higher sums of money, don’t allow yourself and your partner to go onto becoming compulsive shoppers or squander away money elsewhere. Keep your finances and financial goals as clear as you can to avoid falling into a troublesome marriage later.
About the Author:
The above article is written by Eva who is an expert finance columnist for many sites and blogs. In her free time she advises people on various finance subjects.