Money plays a crucial role in individuals’ lives, whether they are single or married. It is vital to prioritize saving and making prudent investments to ensure a comfortable life and secure retirement. Upon entering into marriage, financial considerations become more intricate due to the dual income and increased responsibilities. As a newly married couple, merging finances often entails a trial-and-error process to identify the most effective approach.
It is imperative to have conversations about finances early on in a relationship or before marriage in order to establish a solid foundation for the future. Addressing debt, such as student loans, credit card debt, or other financial obligations, is crucial during the courtship phase. By openly discussing each other’s financial situations, transparency and effective planning can be achieved.
Despite the challenges these conversations may pose, establishing a financial plan early on is imperative. Marriage is typically a financially strategic decision, with couples opting to manage their finances separately, jointly, or through a combination of both approaches, each with its own set of advantages and disadvantages.
Speaking about money management after marriage, Edelweiss CEO Radhika Gupta said that the newly wed couple or to-be married couple should discuss responsibilities before they tie the knot to avoid ugly divorces and separations.
“The newly wed couples should talk it out when they get married and would be managing joint accounts. There should be a goal-based approach. They should talk about their liabilities, short-term goals, mid-term goals and long-term goals and plans to fulfill them. Planning together is the key. As investment advice, for long-term putting money in equities, mutual funds can be good. For short-term, they can invest in slightly safe tools, for mid-term, hybrid funds can be chosen,” Gupta said at a podcast on Pinkvilla.
For general investors, Gupta said that one should plan long-term rather than putting the money in short-term plans.
“One should plan long term and for that mutual funds are a good approach. Doing an SIP in any flexi cap plan, multi cap fund can be helpful. I always say this and I would repeat that the stock pick for next decade is India. I just say invest in India and no other place.
Financial disputes have the potential to strain relationships, as evidenced by a study conducted by the US-based Jimenez Law Firm, which revealed that 29% of divorces in the country are attributed to disagreements over money. While the reasons for divorce may vary in India, there is a noticeable shift as women gain more financial independence.
To avoid conflicts stemming from finances post-marriage, it is crucial for both partners to engage in open and honest communication about money matters without the fear of being judged.
According to Feroze Azeez, Deputy CEO of Anand Rathi Wealth, differences in financial habits, such as one partner being a saver and the other a spender, can lead to friction in a relationship. While minor discrepancies can be managed effectively, major disagreements may result in persistent stress. Azeez emphasized the importance of educating each other on financial matters to facilitate mutual decision-making and prevent strain on the relationship.
Earlier, even divorce lawyer Vandana Shah said in a healthy marriage, it is crucial to maintain transparency regarding assets and salaries. Disclosure of each other’s financial status, including assets and liabilities, is essential for a strong relationship. This discussion is imperative for fostering trust and understanding between partners.