Marriage is a big commitment, it’s not just about preparing for that perfect wedding, but also about a financially secured life ahead. To keep you strong throughout your lives together, therefore, tying the financial knot is just as important as tying the emotional knot. As a newly married couple, you must together plan your finances to avoid any future financial stress. We have compiled together a list of few financial planning tips to help secure your future during the most exciting and important stages in your life:
1. Make a Monthly budget Plan
If you didn’t have the serious talk about how you will manage money before, now is the ideal time to start. The best way to do this is to create a monthly budget of income and expenses together. Along these lines, you must track every expense for initial months by making a list of your monthly bills, groceries, entertainment and other miscellaneous expenses. You will be surprised to know how small things can add up! So, once you are aware of your spending’s, you can cut out non-essential expenses.
Thus, creating a budget and tracking your expenses will give you both a better understanding of how much you need to bring in monthly. It will also enable you to abstain from overspending.
2. Set some Financial Goals
Goal-setting is the standout amongst the most imperative money related “To Do’s” for a newlywed couple. To start with, discuss things like savings, debt payoff plan (if any), car or house purchase and when would you like to start your family.
Also, set aside some time to discuss your individual financial goals and what you would like to accomplish financially as a team.
3. Get your Savings Up
As a couple, you would want to have an emergency fund at all times to help you weather financial storms such as medical bills, costly house repairs or job loss. Therefore, make it a goal to have at least three months of living expenses in the bank if both of you are working. You could likewise utilize a portion of the cash wedding gifts to up your savings in this rainy day account.
When you accomplish this, your next goal should be to have six months worth of living expenses and then eight. Once you reach eight months, you should be on cruise control.
4. Protect your Loved Ones
Term insurance is a good way to ensure that your better half is covered if the worst happens. It can help eliminate debt and replace lost income, thereby, allowing your surviving spouse and other family members to continue with their lifestyle without any financial stress.
Term insurance plans are highly affordable these days. And the cherry on the top is that reputable insurers like Future Generali offer many benefits with term plans, be it monthly income payout option, rider facilities or tax benefits on the premiums paid. Also, the proceeds from term insurance plans are entirely tax-free.
So, sit together, research and carefully opt for the right plan. And if you already have term insurance coverage, review and update the same (if required) and make sure that your spouse is listed as the beneficiary.
5. Retirement Plan
Although, it may seem a bit too early to plan for retirement, enjoying a peaceful life together is going to be a bigger part of your marriage. Therefore, plan for your hay days by investing in prudent investment plans. Equity-linked investments like ELSS or ULIPs are best for long-term financial planning. So, set aside a part of your monthly paycheque for such investments. Increase the percentage of your investment amount when you get a salary hike. It will allow you to plan for an early retirement in your future.
Following these five tips can help you make good progress toward your financial future as a couple. Remember this – the more thoughtfully you work together, the more financial harmony you can maintain in your life!