SMATRT MONEY SERIES
Some married people would joke that there are three “Rings” in marriage – the Engagement Ring, the Wedding Ring and the Suffer-Ring! Ouch! How did that “ring” ever get onto our finger? Statistics have shown that one of the root causes of marital problems revolves around money. Just imagine if one individual can’t manage his finances well, what more when you put the two together (along with a few more juniors!)
Let’s Talk…
Are you a saver while your spouse is a spender? Coming together from two separate worlds, we may have our own ideas and feelings about money. We should sit down with our spouse to discuss how we regard and use money – be it how many pairs of shoes you “need” to buy to how many packs of cigarettes you smoke per month. Be honest about all debts and loans, especially if you have any outstanding credit card loans or the number of Ah Long “friends”! Being opened with your finances, you can be difficult but it’s better to share that information now than face surprises later. Talking about money early in your marriage may save you a lot of heartache.
Tying the Financial Knot
When we tie the knot, we have to ensure that our own financial knot is not entangled. It would be wise to be clear on each other’s roles and responsibilities pertaining to household finances. For example, who is going to pay the bills, save for children’s education and pay those monthly loan installments? It is also very important to decide on the issue of parental allowance as both parties have to agree on giving an acceptable amount to parents on both sides. Ideally, if both the husband and wife are working, they should maintain at least 3 accounts – “My Account”, “Your Account” and “Our Account”. This would allow each party to maintain some independence over their personal purchases while contributing their fair share towards joint expenses. Having a combined Cash Flow Statement showing “His”, “Her” and “Our” income and expenses, may be a good idea.
Another area is on the treatment of each other’s assets and liabilities. If a marriage starts on a clean sheet of paper, then both of you could still decide later on – either in joint names or in either party’s name. However, if the union comes with “excess baggage”, then the couple would need to be clear on how to deal with their existing personal assets and liabilities. Are they going to combine them or treat them separately as their own responsibilities? Very often, couples tend to carry over their liabilities into their marriage and that may be the bone of contention later on in their married life. Having a combined Net Worth Statement showing “His”, “Her” and “Our” assets and liabilities, may prevent any arguments.
Peace of Mind
Another very important area that should be looked into is Life Insurance. It would almost be a necessity to have sufficient coverage when we get married and start a family. This is because we are no longer living for ourselves anymore but also for our loved ones. Are we to leave our spouse and children in dire financial distress should something unfortunate happen to us? Life Insurance ensures that our dependents can pick up the pieces and carry on living with some measure of financial comfort. They need not worry about where the money coming from or whether they would still have a roof over their heads.
For those who already have some life insurances, it is advisable to review your benefits. You may need to drop some coverage if your spouse’s plan covers the family or perhaps enhance them to include your family. It is also advisable to update your beneficiaries if necessary. Ultimately, we want to optimize our benefits to be able to walk down the aisle with peace of mind.
Plan Your Financial Future Together
After reviewing what you have and expressing your feelings about money, you can now start planning your financial future together, which in essence is planning your life together as husband and wife. The other area may be your love nest. Where is it going to be? When is it going to be? Will it be landed or a “space in the air”? If landed, will it be single or double-storey or perhaps a semi-D or your very own bungalow? Property cost may be the single largest family expense and both of you have to manage your expectations.
The second thing may be children. Those bundles of joy may need bundles of cash too! It’s not too far-fetched to say that we may need as much as One Million Ringgit to raise a child in the future as a big chunk of it goes towards their education. Therefore, if the both of you decide to have a football team, then you’ll really need to sit down and start planning!
Last but not least, one of you may decide to quit job after marriage to concentrate on building a family. That’s not a bad idea but this topic should be discussed as early as possible to better prepare yourselves. Both of you have to agree on who’s going to be the “Finance Minister” and who’s going to be the “Home Minister”. It may be gradual (like going from full-time to part-time) or it may be immediate but the decision should not give raise to financial predicament.
Living Happily Ever After…
Marriage is just not a word; it’s a sentence… a life sentence! As you enter into this new stage of life, remember to review your finances together regularly as both of you will be taking a long journey together as man and wife. While Love is important, Money is a necessary ingredient towards a blissful marriage. So, start Planning for a Financially Secure Marriage so that we too, may one day have a fairytale ending: “… and they Lived Happily Ever After…”!
Source : AKPKLet’s Talk… Are you a saver while your spouse is a spender? Coming together from two separate worlds, we may have our own ideas and feelings about money. We should sit down with our spouse to discuss how we regard and use money – be it how many pairs of shoes you “need” to buy to how many packs of cigarettes you smoke per month. Be honest about all debts and loans, especially if you have any outstanding credit card loans or the number of Ah Long “friends”! Being opened with your finances, you can be difficult but it’s better to share that information now than face surprises later. Talking about money early in your marriage may save you a lot of heartache.
Tying the Financial Knot
When we tie the knot, we have to ensure that our own financial knot is not entangled. It would be wise to be clear on each other’s roles and responsibilities pertaining to household finances. For example, who is going to pay the bills, save for children’s education and pay those monthly loan installments? It is also very important to decide on the issue of parental allowance as both parties have to agree on giving an acceptable amount to parents on both sides. Ideally, if both the husband and wife are working, they should maintain at least 3 accounts – “My Account”, “Your Account” and “Our Account”. This would allow each party to maintain some independence over their personal purchases while contributing their fair share towards joint expenses. Having a combined Cash Flow Statement showing “His”, “Her” and “Our” income and expenses, may be a good idea.
Another area is on the treatment of each other’s assets and liabilities. If a marriage starts on a clean sheet of paper, then both of you could still decide later on – either in joint names or in either party’s name. However, if the union comes with “excess baggage”, then the couple would need to be clear on how to deal with their existing personal assets and liabilities. Are they going to combine them or treat them separately as their own responsibilities? Very often, couples tend to carry over their liabilities into their marriage and that may be the bone of contention later on in their married life. Having a combined Net Worth Statement showing “His”, “Her” and “Our” assets and liabilities, may prevent any arguments.
Peace of Mind
Another very important area that should be looked into is Life Insurance. It would almost be a necessity to have sufficient coverage when we get married and start a family. This is because we are no longer living for ourselves anymore but also for our loved ones. Are we to leave our spouse and children in dire financial distress should something unfortunate happen to us? Life Insurance ensures that our dependents can pick up the pieces and carry on living with some measure of financial comfort. They need not worry about where the money coming from or whether they would still have a roof over their heads.
For those who already have some life insurances, it is advisable to review your benefits. You may need to drop some coverage if your spouse’s plan covers the family or perhaps enhance them to include your family. It is also advisable to update your beneficiaries if necessary. Ultimately, we want to optimize our benefits to be able to walk down the aisle with peace of mind.
Plan Your Financial Future Together
After reviewing what you have and expressing your feelings about money, you can now start planning your financial future together, which in essence is planning your life together as husband and wife. The other area may be your love nest. Where is it going to be? When is it going to be? Will it be landed or a “space in the air”? If landed, will it be single or double-storey or perhaps a semi-D or your very own bungalow? Property cost may be the single largest family expense and both of you have to manage your expectations.
The second thing may be children. Those bundles of joy may need bundles of cash too! It’s not too far-fetched to say that we may need as much as One Million Ringgit to raise a child in the future as a big chunk of it goes towards their education. Therefore, if the both of you decide to have a football team, then you’ll really need to sit down and start planning!
Last but not least, one of you may decide to quit job after marriage to concentrate on building a family. That’s not a bad idea but this topic should be discussed as early as possible to better prepare yourselves. Both of you have to agree on who’s going to be the “Finance Minister” and who’s going to be the “Home Minister”. It may be gradual (like going from full-time to part-time) or it may be immediate but the decision should not give raise to financial predicament.
Living Happily Ever After…
Marriage is just not a word; it’s a sentence… a life sentence! As you enter into this new stage of life, remember to review your finances together regularly as both of you will be taking a long journey together as man and wife. While Love is important, Money is a necessary ingredient towards a blissful marriage. So, start Planning for a Financially Secure Marriage so that we too, may one day have a fairytale ending: “… and they Lived Happily Ever After…”!
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