Here are 5 Key Financial Moves To Make Before Getting Married

Getting married soon? Well, you should start preparing yourself to tackle the new financial situation. Marriage not only means sharing of goals, desires and ambitions but also partaking assets and financial liabilities. From personal finance needs to investment, everything becomes shared. Marriage brings modifications in financial situation. Post-marriage accountabilities are certain to grow and bring along a set of money-related challenges. According to financial experts, one should be able to understand the new financial needs and plan ahead. This can build a strong financial footing for starting a new relation. 

Here are 5 key money moves one should make before getting married:

1. Indulging in money talks

It is significant to discuss about finances and get into money talks before getting married. This is helpful in understanding each other's financial needs and liabilities. Talking about financial goals is also very essential. Things such as financial security for the non-earning partner/existing financial liabilities if any/future financial goals should be discussed. "The conversation should include both the partners' credit profiling, which comprises of previous unsettled loans, credit card bills and even each other's credit score. Apart from that the partners should discuss each other's current finances as well. Talking about past is great but talking about the present is equally important. The last thing would be budgeting, which includes pre- and post-marriage expenses and savings for the future", said Brijesh Parnami, Executive Director and CEO, Essel Wealth Services.

2. Managing bank accounts

 It is advisable to decide pre-marriage only whether the partners should continue with their individual bank accounts or get a joint account instead. However, here the need may differ from person to person. According to financial experts, having one joint bank account offers a number of benefits. The money in the account is easily accessible to both the partners hence making it easy for any of the partner to withdraw money, make payments and track their financial activities. This could help the partners plan their finances and manage their wealth seamlessly. 

On converting existing individual accounts to a joint account, Tushar Goyal, Business Development and communication, Meri Punji IMF Pvt Ltd said, "Assuming both partners are taxpayers and they get their earnings in their respective bank accounts, it is suggested that they should open a new joint account instead of converting existing accounts. They should, however, make each other nominees of their bank accounts. In case both partners are not taxpayers then converting a single bank account into a joint account is advisable."

3. Being prepared for the unexpected

With marriage come various unanticipated expenditures which the partners have to bear. Setting, planning and managing the necessities post wedding are not that easy. However, a careful financial assessment and planning can be the saviour. The joint account opened/converted can contribute for any such unexpected need. Any sudden unplanned expense can be taken care of from pre-marriage savings.

"Start preparing from the very beginning. There are various unexpected events that might arise after marriage. Both the partners should be ready before they enter into holy matrimony. One should build a cash reserve to cushion against future uncertainties like unemployment. It is essential to have a cash reserve of up to six to 12 months of living expenses to provide a cushion against such an event", said Mr Parnami.

It is also prudent to opt for a term life insurance policy. Term policies are cheap and can help the family in the eventuality of a partner's death or a mishap. Health Insurance policy is also a must.

4. Financial assessment and decision-making

The partners should undergo a financial assessment before getting married.  As an individual the partners should know exactly where they stand. The financial wellness assessment should include important information about current financial status. One should also review the recent expenses. The couple can gradually indulge in financial talks and initiate planning. Before making a major financial decision, one should always be patient and do an in-depth research on the same. Once you do your research about an option, it's better to take a closer look and examine the pros and cons.

"If both partners are financially savvy then joint decisions are always the best. If only one partner is financially savvy, then that partner should take decisions that are in the best interest of the couple while keeping his/her partner informed. Financial decisions which are related to long-term goals should be jointly-decided", added Mr Goyal.

5. Managing EMIs and credit card bills 

Post marriage, monthly expenses surge. However, the partners should not be disturbed by the pre-existing EMI (equated monthly instalments) and credit card bills which should be a tool to meet cash flow needs against assured future earnings. It is better to make a budget and keep in mind the monthly cash inflows to avoid overspending on credit cards/EMIs.

"If an individual wants to manage bills it is always better to start by setting up a budget. If the credit card bills are too high it is advisable to take a personal loan and pay off the credit card bill as the interest payable on personal loan is comparatively lower. It is also advisable to make lifestyle changes to manage EMIs and credit card bills before marriage", explained Mr Parnami.