On their engagement day, Tina excitedly exclaimed to her fiancé Rubal, “Finally we are engaged and soon about to tie the knot.”
Rubal replied, “Yes. But before that, I am planning for our finances so that we don’t have to face any financial troubles in the future. “
Tina then said, “Ohh Really. Is this something we need to discuss before our Big Day? I was hoping for something romantic!”
Tina’s friend Arnab who was silently listening to their conversation said, “Talking about finances with your fiancé may not seem like the most romantic topic. But what better way than to show your loved one how committed you are to a lifetime of happiness and financial security together?”
Arnab further added, “Don’t forget an important element of your new life together: Getting your financial lives in sync.”
Rubal then added, “That’s what I was trying to explain Tina.”
Arnab continued, “I have some pointers which will help you both to get started:
- Have “the talk.”
Tell each other about the key financial information and important non-financial information. You can also reveal where your valuables are located. It’s important to understand each other’s financial dreams and plans so that you know exactly what to do in any unforeseen situation.
- Meld your financial responsibilities.
While your chemistry may be great as a couple, take steps to make sure your finances mesh well together too. Avoid unnecessary arguments or confusion down the road by determining upfront your spending and saving habits, whether you’ll open a joint account and if the responsibility of paying the bills will be handled by one person or together. The key is clear communication with one another.
- Contribute to an emergency savings fund.
A financial rainy day is never in the forecast, so it’s important to always have at least six months’ worth of income in your savings account or money market fund, which can pay for the unexpected.
- Get life insurance.
If you have someone who depends on you financially, you need a term life insurance. You may have a life insurance coverage through work but often it’s only one or two times your current annual salary. And while that may sound like a lot, think of what would happen to your spouse or partner financially in your absence. Will they have to pay off the mortgage? Will they have to pay for your outstanding car loan? Will they be able to single-handedly manage the bills and other financial liabilities? Plus, life insurance through the workplace generally discontinues along with your job.
Getting an individual term insurance policy makes sense. It’s very affordable when you’re young and healthy.
After listening to Arnab, Tina and Rubal decided that they will not only plan their vacations and ceremonies but also their financial lives post marriage.