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Money management for newly weds
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You've just been married and are back from your honeymoon. As you settle down to a new life you'll talk about your dream home, your career, planning your family and other dreams. Very rarely do couples discuss money, although it is a vital issue even for day-to-day living. An important element of a successful marriage is the ability to handle money together. Money is a resource, which gives you, varied choices to live your life.
The reason why couples squabble over money is largely due to their different perspectives on money. Once this underlying principle is understood couples will be able to form a sound financial foundation. Couples should understand that even with a modest income they could live comfortably and free from consumer debt as long as they handle money responsibly and live within their means.
- Talk about money
Find out what each of you feels about money. What does money mean to each of you? Are you the saving kind or the spending kind? What constitutes a major purchase to each of you? Discuss about your future goals and their financial implication, like going in for higher studies, buying a home, career changes, relocation, starting a family etc.
- Making a commitment towards spending goals
Once you've decided what your financial plan is, you will have to make a strict commitment towards achieving these goals. For this, you may have to make some adjustments to your spending habits. A commitment to goals and a sound financial plan is a must.
- Managing daily finances
After setting long-term and short-term goals, the couple should make plans to achieve these goals. The best way to achieve this is to draw up a budget allowing for regular expenses and providing a cushion for unexpected expenses. Keep track of your budget and check where your money goes, Make a note of every amount spent and go through your spending weekly or monthly. Ascertain that your spouse too makes a habit of this. Once you've made a note of this you'll be able to list your weak spots. Your partner and you can then sit down and consciously make an effort to reduce unnecessary spending.
- Bank accounts
You can opt to continue having separate accounts or can have a joint account or a combination of both. Remember to update your old accounts with your name change if you are going to retain it.
- Future savings and investments
Saving at least a little each month is an absolute must in order to safeguard your future. No matter how much or how little you earn, discipline yourself to set aside a portion of your income each month for savings. If both are working, you can see that you save and prudently invest one partner's earnings. In case you or your partner has debts, your first priority should be to clear off the debt. Don't let interest pile up.
- Credit cards
Review your credit card accounts and make necessary name changes. Reduce spending on your credit cards and always keep track. Instead of having a number of credit cards you can retain just one or two, so that it will be easier to keep track. You can also cut down on unnecessary maintenance costs.
- Changing important documents
Make necessary name changes in all important documents. Check out your health, auto and life insurance policies. Change the marital status as well as the beneficiary in all your deposits, mutual funds and other savings and investments. You can include your spouse as a dependent in various plans.
The above tips are just the start of your financial planning together. Remember that financial planning is not a dull and dry exercise but one which will let you live life fully and help you fulfil your dreams as a couple.
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Geetha Dasarathy
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