It’s the day after marriage. You feel relieved because finally the financial mayhem of getting married is now a thing of the past. All the preparations for one of the most important occasions in your life is now over, all your suppliers have been paid and not a single centavo to be spent anymore.
So what now? What’s next on your financial agenda?
I got married 2011 and after marriage I didn’t have a plan financially. In my mind, since I don’t have a kid, there’s really nothing to prepare. We’ll cross the bridge when we get there. I had no savings then (because I spent most on the wedding), fortunately, no debts as well. My wife was a good saver and money manager; I was not. As our marriage grew, I learned a lot financially and here are some of those I want to share:
Discuss your financial goals with each other. As married couples, there will be goals that you both share (buying a house, preparing for kids’ education, buying a new car) and individual financial goals (paying debt, retirement plan, financing one’s hobbies). It would be good to start off by talking about these goals and collectively work on a plan to achieve them. Sharing goals also help build stronger relationship by strengthening commitment and support to one another. Plus, knowing that someone is supporting your goal/s make the journey much more enjoyable.
Budgeting and tracking expenses can lead to a healthy, positive cash flow. Not just that, it also prevents fights about money. Men usually are not very detailed when it comes to money management. However, most women are. When men are asked how they spend their salary, most often they get annoyed. In the end, men will decide to just let their wives handle their salary and complain about it all the time. It is important that somehow both parties know how money is being spent because it will matter sooner or later. Plus it strengthens the trust between the couple.
Assess your savings and add more. Your emergency savings when you start a family is definitely higher than your needed savings when you were single. So as a couple, assess your current savings and have a plan to add more. This way, as your family grows, so does your emergency savings.
Clear whatever debt you have. When you marry, the debt will no longer be just one person’s problem. Emotionally, mentally and psychologically, both will carry the burden. I’ve had a client who was debt free when he was single. After he got married, he learned that his wife has a 6-digit debt spread across credit cards, home loans and personal loans. It got so confusing for the couple that eventually the guy decided to accept it as it is, so the debt grew. Fortunately, they were able to get their acts together by doing #2 and clear their debts within a year.
Insurance is better availed when single/as early as possible. I got my first life insurance when I was 28—three years before I got married. At that time I never really valued it. But when our daughter was born, I was thankful I got a head start. Expenses grow as the family grows and the dilemma of choosing between getting insurance versus buying our child’s milk or diapers will become more challenging if you wait. Plus, I’ve heard this statement far too many times from married couples I’ve talked to: “Sana dati ko pa sinimulan to!” That shows the importance of having insurance as you grow a family. It doesn’t have to be a big amount, just give yourself a head start while it is still easier for you to do so.
Get educated on investment options. Whether it is business, real estate, stocks, pooled funds or bonds, it is important to understand what investment options you have and how they work. You can start investing if you have the capacity to, but if not, just be ready as opportunities can strike any time.
Planning marriage is not just about the wedding day; it goes beyond that. Marriage is a lifetime commitment to planning the life you want to share as husband and wife. Having a strong plan on how to achieve that ideal married life is a good start to having a lasting relationship as a couple. More importantly, it makes growing a family more fun and less of a burden.
Jeremy Jessley Tan is Registered Financial Planner of RFP Philippines.