Marriage or for that matter live-in changes an individual's life in varied ways. Apart from sharing ideas and ambitions, it also brings amendments to one’s financial situation. According to analysts, young couples should have a robust financial plan. They should be able to understand the new financial needs and plan accordingly.
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Ahead of this Valentine’s day, let’s have a look at some money moves young couples should make:
Have an honest financial discussion
It is important for young couples to discuss their finances. This helps in understanding each others’ financial needs and liabilities. According to experts, couples must discuss their credit profiling and talk about unsettled loans and credit card bills. An honest discussion over finances is essential to plan the budget.
Build a budget
It is essential to start keeping a track of monthly expenses and managing them. This helps in avoiding overspending.
Try to keep an emergency fund
Though difficult at the beginning, young couples should try to maintain an adequate emergency fund. This helps in tackling financial emergencies.
"It is important to have a cash reserve of up to 6 to 12 months of living expenses. Any unplanned expense can be taken care of from this fund," said Brijesh Parnaami, Chief Executive Office, Coretree - a financial advisory firm.
Try to clear existing EMIs and bills
Partners should try to clear the existing EMIs and credit card bills as soon as possible. If the bills are too high, the couple can take a personal loan and pay off the bill.
"The interest payable on a personal loan is comparatively lower. It is also advisable to make lifestyle changes to manage EMIs and credit card bills before marriage," said Tushar Goyal, Business Development and communication, Meri Punji - a finance and insurance firm.
Have at least one bank account held jointly as a couple
Having a joint account as a couple (especially when married) is helpful for making investments or taking loans. Applying jointly for home loans have added benefits. In case, both the partners are working, they can avail of tax concessions.
Take a term life and health insurance policies
Term policies can help the family in the eventuality of a partner's death or a mishap. Also, it's important to take health insurance. According to Sachin Karnik, Vice President, Finance, ITM Group of Institutions, health insurance provides a much needed financial backup at times of medical emergencies.
Start investing early
One of the basic rules of investing is to start early so that time works in favour. Once a couple is married, both are shouldered with the additional responsibility of taking care of each other, which also includes financial care. An early start helps in generating larger corpus for future needs.
Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
First Published: Feb 12, 2020 3:27 PM IST
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