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Are you financially ready to get married?

Before you make up your mind to walk the aisle and exchange vows, ask if you are financially ready?

Marriages might be made in heaven. But, expenses have to be borne on earth. As soon as you get married, expenses immediately come knocking.  From wedding-related expenses to buying a house, car, and durable household items like a refrigerator or a washing machine – the claims on your hard-earned money seem endless. Before you make up your mind to walk the aisle and exchange vows, ask if you are financially ready? 

Analyze spending habits 

As unmarried individuals, some of you might be staying with your parents and they might pay for your electricity and grocery bills. However, after marriage, these expenses will have to be borne by you – more so if you move to your new house. 

It is better to start off in a positive way by cutting down on any unnecessary expenditure. If you are spending too much on transportation, consider car pooling or public transport. Try to reduce your entertainment and other discretionary expenses, within reason. 

Use these savings to build a post-marriage fund. Invest it into liquid funds or short-term debt funds. It will provide for any sudden increase in expenses.

If marriage is a few years away, start building a house fund. Ensure you are building a reasonable corpus - to the extent of 20% of the house value - before you actually buy. This can be parked in short-term debt funds and liquid funds.

Build a Robust Savings Kitty

If you don’t already own a house, it’s likely you will want to eventually. Buying a house is a long-term decision based on many factors including that of locality, proximity to your workplace, as well as wanting to be near-and-dear ones. You wouldn’t want to rush into this.

If marriage is a few years away, start building a house fund. Ensure you are building a reasonable corpus - to the extent of 20% of the house value - before you actually buy. This can be parked in short-term debt funds and liquid funds.

Moreover, bump up your retirement savings by investing in a diversified basket of equity mutual funds. An early start gives you a significant advantage over time. Investing in tax saving mutual funds known as ELSS can be a smart way to start this early as this doubles as an equity investment that can contribute towards your retirement kitty. 

Debt Reduction Plan 

While debt need not be reduced to zero, it is important to cut it down to manageable levels. One of the popular debt repayment strategies – especially when there are multiple loans - is to create smaller goals. Finish repaying one loan and take it off your books completely. It will give you the satisfaction of achieving a small goal. Then, move towards the bigger goal. Credit cards and personal loans carry some of the highest interest rates among all categories of loans and should be the first to be paid back. Also, look at repaying car loans and student loans, and in that order. 

If you already own a house and are paying home loan EMIs, congratulations. While it’s a ‘good debt’, ensure your finances are robust enough to repay EMI obligations. Bump up your emergency fund to the extent of at least six EMIs. 

Money talks 

Communication with your future partner is important. Ensure both of you are on the same page when it comes to finances. Post marriage, your income, assets, as well as debt are going to be fused. Be candid about your plans for the future – whether you are going to start your own business, shift nature of job, and so on. In turn, ask your spouse about her or his plan. It will give you an inkling about future incomes and combined financial position of your family. 

Don’t hesitate to discuss financial goals – especially retirement. Ensure at least a third of your combined income is going towards meeting your retirement goals and into equity. 

Also, discuss money matters – how you are going to manage household finances.

Marriage is an important milestone in the life of an individual. It’s important that you be financially prepared for it and walk the aisle with confidence. 


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