Before Getting Married (1)
I have a friend who will be getting married to his long-time girlfriend in a few months. They form a very lovely couple — both are in the prime of their careers, are diligent and prudent, and have a bright future ahead. They will build this future together, have their own children and of course have their own share of ups and downs, challenges and obstacles, successes and failures.
I cannot help but look back at the time when I was also about to get married: I, too, was in the same circumstances as my friend. Now, almost a decade later, I cannot help but think of the things that couples must do financially first before tying the knot.
Here are two of four tips in order to have a peaceful and happy married financial life:
Talk about how you will handle your finances. Being married means joining someone in one household. That means roles, duties and responsibilities. These not only cover the household chores but — equally important — also the family’s finances. How will you manage your money as a couple? Will you centralize and pool your money with one person doing the budgeting? The wife is usually expected to do so but I have seen husbands do it. After budgeting, will both just have fixed allowances? Some couples do not pool their funds but instead assign expenditures –utilities for the wife, tuition for the husband, etc.
Couples should also think about how they will budget for common and individual needs. Remember that each may come from a different lifestyle and thus may have different spending expectations. There might be a bit of a tug-of-war here but compromise and communication is key. How and what will you adjust now that you are married financially as well?
I give my salary and other income to my wife—she does the budgeting, gives me my allowance, (she’s quite OC and has the talent for it, so I know she’s more qualified) while I do the investing decisions using what is left. In our family, she’s the treasurer and chief finance officer while I am the chief investment officer. By the way, we also do budget for monthly “dates” — our time away from our kids — as a couple so it’s not all scrimping. What’s essential is that everything has a budget and that we stick to it.
Apart from budgeting, couples should also talk about how to save up for life goals —whether these be family or individual targets. They should talk about how and what to prioritize given available resources.
My wife and I discuss significant expenses such as family vacations, an appliance, real estate purchases or travel abroad. We do fight over some items but what’s important is that we talk about it and arrive at a mutual decision.
Talk about your responsibilities outside of your family. This is bound to happen: helping other people—and relatives at that— given our culture. Being married means being also tied to your and your spouses’ families.
There will be cases where one spouse may be supporting a parent with their living expenses or a sibling with schooling. It may be that both are supporting or anticipate supporting relatives.
This can be a quite prickly issue as it involves blood ties. But as with all potential concerns, couples should talk about it. Who to help and to what extent? Will you help all relatives that come to you? Will you give to the extent that your savings and emergency fund will have to be touched as well?
It will be helpful if the couple sets aside a budget for these responsibilities or eventualities. Being generous is an honorable trait but couples should bear in mind that the family they are building has its own needs — food, utilities; not to mention their child’s needs as well. They may have responsibilities to other people but they should also be mindful that their own family is their primary responsibility.
More tips next week.
Rienzie P. Biolena is a registered financial planner of RFP Philippines. He is president and chief financial planner of WealthArki and Consultancy, a financial planning firm. Learn more about personal financial planning at the 68th RFP program this May 2018. To inquire, e-mail email@example.com or text <name><e-mail><RFP> to 0917-9689774.
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