Traditionally, in India, couples have mostly been regarded as a single unit when it comes to financial planning. Sharing the financial gains and burdens becomes part and parcel of married life. There are individual traits when it comes to handling finances, and they can be an asset or a deal-breaker in a relationship. This arises due to different saving and expenditure habits, and not being able to come to a common consensus. A 2014 survey conducted by Money revealed that 70 per cent of married couples fought over money, and it ranked ahead of chores, sex, togetherness, amongst other reasons. On the financial front, 55 per cent couples argued over expenditure, 37 per cent on saving habits, 21 per cent on financial deceit and 11 per cent on being excluded from any finance-related decisions. So, is there a right or wrong way of dealing with finances as a couple? Read on.
Discuss and inform
Be open about your financial status, loans, specific regular expenses, and salary. Newly-married Bengaluru-based IT consultant, Minakshi Deb, 25, tells, “I had an arranged marriage, but Sudhanshu (Deb) and I met quite a few times before getting married. During our conversations, he was very clear about his salary, and that he has a home loan to take care of. I have a bike loan which I am repaying, and also told him about it. Discussing our individual liabilities gave us clarity on how to go about our savings.” As time passes, financial goals for a couple might change, but one must keep the discussion going at every level.
Identify financial responsibilities
Common expenses like rent, utilities, groceries, and daily household requirements, should be shouldered by both partners. You can either distribute the amount equally or commensurate with the salary each earns. Pune-based blogger Nirali Vaze Tanwar, 31, says, “Being a salaried employee, my husband brings in a steady income. So, most of the major expenses are taken care of by him. While being a freelancer, whatever comes in from my paycheque is used in other expenses.” Such financial decision needs to be discussed and agreed upon by both partners right from the start. Niraj R Nanal, a certified financial planner, advises, “Once you identify your financial goals together, allocation of expenses and responsibilities becomes easy. Also, maintaining a joint savings account can alleviate hassles, if any, in the event of a partner’s demise.” Pune-based pre-school teacher Gauri Oka, 27, says, “We have a joint account for all the regular household expenses. Since my husband is in the merchant navy and is away for months, this simplifies our lives.”
Managing mantra
Each couple needs to find their own idea on how to manage their funds based on their individual salaries, expenses and saving plans. Tanwar adds, “Ensure that bigger investments are done in a timely manner. I maintained a yearly recurring deposit around our birthday months, so we could always splurge a little on our special days. We both are spenders, but we try and control the urge of wanting to splurge, and plan big buys and trips accordingly.”
Mumbai-based Ridhi Karve, a 32-year-old procurement consultant, shares, “I am an impulsive shopper, and end up buying much more than what is planned for. My husband, Karan, on the other hand, is a budget shopper. Initially, we used to argue over my shopping habits as I couldn’t save much. Eventually, we came up with an idea. Now, every time I shop, I put in the same amount into our joint savings account. This way, I end up reducing unnecessary expenses as putting equal amounts into shopping and saving was emptying my salary account.”
Nanal offers an additional word of advice, “Today, it is important that young couples allocate their money where it can beat inflation. With changing lifestyles and higher aspirations, it is important that their wealth grows in accordance with inflation. Investing in mutual funds can be a good way for young couples to start creating wealth in a structured manner and with appropriate safety.”
It is important that young couples allocate their money where it can beat inflation.
Expert speak
Niraj R Nanal,
Certified financial planner, offers a few tips:
Create a diversified portfolio of equity, debt, or real estate, which will ensure a higher return than the inflation rate.
Work smartly and create passive income to fall back on.
Create your own provision for retirement.
Financial planning is a structured science. Seek advice from a professional for better planning.
Preparing a will eliminates any legal hassle for the distribution of wealth in the event of a partner’s demise.
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