A Personal Finance Checklist for Newly weds

Will : legal declaration of how a person wish his/her possession to be disposed after their death

Fund : An amount of money saved or collected for a particular purpose

It is a type of pure insurance plan where the beneficiary will get the benefit only in case of death of the policy holder during the policy term.

The gain or loss in an investment over a specified time, with respect to the amount of initial investment. It is generally given in percentage.

Person(s) appointed by the account holder, to whom the securities/properties will be transferred in order to facilitate the transmission process among the legal heirs, in case of death of the owner of the security/property.

Person(s) who will be authorized by the policy holder to enjoy the benefits of the policy in case of the death of the policyholder or owner of the policy.

Amount deducted UPFRONT from the investment generally in insurance for sales charges/ agent commission which will in turn reduces the investment value

Unit Linked Insurance Plans are the type of insurance where part of your money is invested in units that represent Shares and debt instruments and the remaining is used for your premium.

It is the maximum amount, the insurance company agreed to pay in case of claim by the policyholder. The amount depends on the amount of damage/loss happened and the premium paid by the policyholder. It is also known as sum assured.

It is the raise in the value of Consumer Price Index. That is the rate of increase of the price of a goods or services.

Getting married is one of the most important events in your life. There is so much to consider—the flowers, the jewel, the dress, the venue, the photography—the list goes on. Once you are back from the honeymoon, the daily life of marriage begins and also begins the challenges of managing the finances of a new household with your spouse. In recent studies, many couples ranked financial matters as one of the most essential factors when it comes to happiness in a marriage. It is one of the key factors causing marital stress.

Money Compatibility

First thing to do is to check how compatible you and your spouse in money management. You may be conservative and your spouse may be aggressive. You may think that the best place to invest is stock market and your spouse may think bank FDs.

You should communicate your money management style to your spouse as well as you need to understand the money management style of your spouse. Both of you need to analyse the merits and demerits of money management style of each other and their own. Then you need to create a mutually agreed combined money management style.

This will be vital to you both throughout your married life to help minimise stress from disagreements about money.

Update Your Records

Change of Address: You could have shifted to your in law’s place or both of you could have shifted to a new place. So you need to make necessary change of address requests to your bank accounts, demat accounts, mutual fund accounts and so on.
Change of Name: Generally the women change their initial or the last name after their marriage. This need to be updated in all the accounts.
Change of Nominee/Beneficiary: You may like to change the nominee to your spouse for the investments, accounts, insurance policies which you have taken before marriage.
Changes in Will: You also need to create a will if you have not created one so far. If you have already a will, then you need to revisit your will now.

Assign Financial Responsibilities

You need to decide, who is going to take care of day to day money management i.e. paying bills, monitoring investments and the like.

Develop a Family Budget

You need to create a budget for your family that gives extra money and life. This budget should take into account both of your income, the individual expenses and family expenses.

Create an Emergency Fund

You need to accrue savings for some surprise situations like loss of job, break in job or sudden expenses like a major repair to your car or house. Generally the emergency fund need to be in the range of 3 to 6 month of family expenses.

Insurance Coverage

So far, you may not be having any dependents or less number of dependents. You could not have considered life insurance or take for a less coverage. This is the time to look at life insurance seriously. When I say life insurance, I am talking about only term insurance and not the ULIPs. Ulips have been rejected by the market for its heavy front loaded charges.

Debt Payoff Plan

Suppose, if you are already on debt, you need to create a 11 ways to get out of debt. This plan will help you in getting out of debt and staying out of debt.

Spend Smarter and Save More

Spending habits will be different from individual to individual. Both of you need to align your spending pattern and learn how to spend smarter and save more.

When both are working and not having kids yet is the stage you have more income, especially more disposable income. Couples need to be careful and avoid overspending and save as much as possible during this stage. This will ease you out when you have more expenses at the later stage of your life.

Set Combined Financial Goals

Both of you need to spend some quality time discussing about the financial goals. like buying a home, international vacation and the like. This is the right time to plan your retirement.

Chalk out a Financial Plan

Once you have set the combined financial goals. then you need to chalk out a financial plan to achieve these goals. You need to take into account growth rate of your income, inflation on your expenses, time set to achieve various goals, rate of return expected from various investment options.

This is slightly a complicated procedure and this plan need to be review periodically. That is why it is better to outsource it. You may seek assistance from a professional financial planners.

To financially succeed, it needs teamwork from both the partners. As a newly married couple, you have enough time and plenty of opportunity. I am sure that with this checklist and the guidance from financial planner, you will reach your life goals together.

In order to reach your life goals, you need to create a carefully thought out financial plan for the financial needs of your family. If you want to create a workable financial plan, then I firmly vouch for you to take advantage of