How to navigate finances as a newly married couple?

The ink on your marriage certificate has dried, you are done sending thank-you notes to the guests who made it to your nuptials and your phone gallery is awash with photos from your honeymoon.

From independence to interdependence – as you embark on this exciting journey, money talks are important for a secure future. Whether you have recently tied the knot or enjoying your courtship, financial planning with your spouse can work wonders for your marriage. On the other hand, the lack of a plan or the lack of active participation of either of the partners can be a catalyst for conflict which may spill over to other areas of your marriage.

Starting your journey with a financial planner

For newly-married couples broaching the subject of money can be tricky especially in the early days of their marriage or if they haven’t known each other for very long, as is the case with most arranged marriages in India. In such cases, hiring a financial planner can be the first stepping stone to simplifying long-term money management strategies.

Things may be a tad easier if you have know your partner for a while before walking the aisle but for those whose courtship has only spanned a few month, soliciting the services of a professional can establish clarity early on. In a quintessential arranged marriage set up, a couple may face inhibitions about having candid money conversations. Also, most women today are armed with jobs and higher education credentials when they get married as opposed to yesteryears when women used to be clueless about money. This lends to a distinct mindset in terms of finances and an expert can be of immense help in ironing out differences that may arise because of this.

Accepting differences

While couples who have known each other for some time before tying the knot may have to deal with a lesser degree of queasiness when navigating finances after marriage, familiarity alone doesn’t guarantee a smooth ride in the money management department. It is important to not get carried away and start n harbouring expectations of making your partner see eye-to-eye when it comes to personal finances.

For many couples it is only post-wedding that they learn how attitudes towards money are shaped by various factors such as lifestyle, parents’ approaches towards money, professional achievements, and financial standing before marriage as well. Hence it is unwise to expect your spouse’s financial ideologies and goals to match exactly with that of your partner and it is worse to try and forcibly align them. The trick lies in accepting differences, understanding thought patterns about money, aligning your spouse’s knowledge levels, and staying abreast about the latest developments in the world of personal finance.

Knowing your goals

With an increasing number of women joining the workforce, priorities and goals for newlyweds are also witnessing a shift. Starting a family immediately has ceased to take precedence for young couples and it is becoming increasingly common for those newly married to dream of launching a business or pursuing higher education or travelling extensively before entering parenthood.

The sooner couples start having the conversation about money, the better it is for their financial health in the long run. The honeymoon phase is an excellent time to discuss your personal and financial goals - this includes higher studies, purchasing a house, retirement plans, and so on. Newlyweds should begin creating a financial plan, break down the goals into short-term and long-term goals and determine what kind of asset allocation is applicable for each goal.

The ease afforded by mutual fund investments

The flexibility and convenience of mutual fund investments make them ideal investment vehicles for newlyweds as they find their bearings in this new journey. The variety in mutual funds is a big plus for diversification. Goals such as retirement will have the longest span and are apt for aggressive equity mutual fund allocation. For such goals, asset allocation is more crucial than the choice of mutual funds. A mix of large-cap and mid-cap equity can be formulated along with small investments in small caps to provide a gentle boost to returns over time. A debt component and yearly rebalancing would round up the picture.

Newlywed couples should also strive to not miss smaller yet important goals. For example, you can use liquid funds for building a contingency fund and ELSS funds for tax planning. SIP investments every month are a convenient way to invest in a disciplined manner. Time has the greatest impact on the final result and this is an advantage most newlyweds have. Starting early can work wonders for your long-term financial health.