Though marriage is not the only thing in a girl’s life. But once committed, marriage means caring & sharing. Being a smart wife, you will know that the most important thing you are sharing with your better half is your life & your finances are a part of that. How you manage your finances together can have a significant impact on how your marriage will survive the test of time.
RBI is observing June 5-9, 2017 as Financial Literacy Week.
Use this guide & get him to discuss with you towards building a sound financial plan.
1. Let your incomes and your spending habits be known to each other
Openness is critical in relationships when it comes to managing your finances. Knowing about each other’s income and expenses can help you decide how much you can afford to spend, save, and push towards mutual as well as personal financial goals.
You can plan around what you know, not around what you don’t. Also, it makes sense to talk to your partner, if one is planning to hop job.
2. Divide your money into what you will spend jointly on and what belongs to each of you separately.
Decide on accounts, joint or separate? If you go for a joint fund then decide what it will cater towards (Rent, EMIs, Food and Grocery Bills)
This is very well a personal decision; however, your money should be yours as well as for your family. You can also put a part of incomes into a joint account from which all expenses and savings can be catered to.
On the other hand, others prefer to create separate accounts. One for each partner along with a joint account into which both of you will pool money to cater for joint expenses. This approach allows you to cater to your needs as well as to your family.
In case you have a joint account, ensure that you both agree on where the money will be spent. Not being on the same page on this issue can lead to conflict.
3. Smart wife saves first. Set aside 20%-30% of your joint incomes, at least, to cater to your savings.
Saving first should always be your priority after catering for non-negotiable expenses like rents and EMIs. You should save at least 20%-30% of your joint take home incomes. This then needs to be invested appropriately based on your financial goals, such as retirement.
To add to it, always ensure there is saving for any contingency in a liquid short term debt fund. The amount is generally your 3 month expenses.
4. Decide on your short term and long term financial goals.
Clarity about your couple short term and long term goals is important for the smart wife. You should also prioritize them. You should both maximise your investments towards these goals. Dual income gives a boost in meeting goals quicker, even if they are bigger.
5. Get Health & Life Insurance
Even though you have health insurance from your respective employers, it makes sense to get health insurance for the both of you as a family. Also critical enough for both of you is to have term plan insurance. As a thumb rule, the insurance amount should be an appropriate multiple of your annual expenses.
Let us know your thoughts on this. Tell us how you manage your couple goals.
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