By Finbar Garcia, LUTCF, FSS, MFA
‘Dollars and Sense’ monthly columnist
For many couples, during courtship, financial discussions are not the main part of relationship building. However, as the wedding planning starts, they would then realise that every penny counts. The cost of a wedding can be expensive if not controlled and some things can be left out to reduce the overall cost.
Set a budget
Setting a budget is the first stage and both individuals must agree to the plan. This budget can be split between both individuals, as some support may come from the respective families.
Start with the guest list, decide on how many persons will be on your list and work it down. Not everyone you know should be invited, make sure that these guests will add value to your marriage.
As best as possible, the venue should be close to your church, to reduce time and cost, as some hired services may charge based on distance.
The menu is another area that can take a bite out of your budget. Delegate tasks to both families; this will surely build a family relationship.
Determine financial goals as a married couple
Now that you are married, what are your financial goals? Before we get into this somewhat complex area of marriage, there are some things that married couples need to know.
You are both unique and bring a certain value to your marriage. It’s not about ME or YOU, MINE or YOURS. It’s about US, growing and building together.
Money is one of the most difficult areas that couples face during their married life – you have to be open and honest with this. Here is a list of things that couples need to do.
Prepare a realistic budget
As you are both living together, budgeting will assist in achieving those collective goals. Within the budget, there are three areas of concern.
Fixed Expenses— these are items such as savings, rent, loans, hire-purchases, emergency funds etc.
Variable Expenses—these are bills that vary monthly, and you can control as best as possible.
Discretionary Expenses—this is where you can squander part of your income on all the non-essential items. Keep a close eye on this area as it can erode your goals.
Communicate long-term goals
Goal setting is important. If the goal is to acquire your first home, then sit and plan it together. Based on your current living accommodations, renting, or living by in-laws, you can now determine how much can be saved towards the new house.
Set aside some time to discuss these and other money matters as a ‘money date’. This will create a single mindset as to where you all are at and what adjustments may be needed, if any. Use the SMART acronym in setting these goals —S…specific, M…measurable, A…achievable, R…realistic, T…Time-bound.
Having prepared the budget, you would then realise how the expenses should be allocated. Try to be as equitable as possible. Once there are two incomes, this should be easy to do. If only one spouse is working, then your budget should be as tight as possibly to attain those goals.
Planning for children
It is such a joy to have children, but there are increasing costs ‘year on year’ as you both continue to build and grow together. The biggest financial part of bringing up children is education. This you will need to place in your budget as that time reaches.
Education planning is just as important as any other goal, so you must place emphasis on this as you add it to your budget or other investments towards it. Adjustments will be needed as you go along.
Planning for the unforeseen
In life, there are things that are unforeseen, and the two major ones are health issues and death. While some persons don’t usually focus on these two areas, if any one of these were to happen to any married couple, it can have devasting effects on all those goals that were planned for the family and children.
With regard to health, it is strongly advisable that each spouse have adequate critical illness coverage that will not only cover the major medical issue at hand, but also cover at least three years of your share of the monthly expenses. Based on the ailment, it can take up to three years for recuperation, so it’s better to cater for the worst but pray for the best.
The other area is death. This will create a financial void within the family and can cause serious financial hardship if not dealt with early. Having the correct amount of life insurance coverage is key to proper financial sustainability for the family if you are no longer in the picture.
How much do you need in life and critical illness coverage? This can be discussed with your insurance agent to create the ideal family plan.
Remember: there is no my money, his money, or her money in a successful marriage. It’s all about budget together, save together, and plan together.