Just married? Get your finances right!

or the love of truth, let us get the facts right!

Your wedding was all that you dreamt of. And the honeymoon, the best.

Zip to reality: credit bills, lenders screaming at your door, unpleasant phone calls and reminders.

Welcome to the world of debt.

• Unfortunately, you may be in for some nasty surprises. And a lot of financial baggage will get unloaded on you.

How do we make sure the word 'finance' is not taboo in your marriage?

Here are some suggestions based on experience!

• How must a young couple save?

1. Clean out the debt skeletons

Marriage between two independent earning partners does not necessarily mean an automatic union of the finances. As a double income couple, both of you may bring different saving and investing approaches to the relationship.

The prudent way out is to discuss finance openly. Just because s/he married you does not necessarily mean that s/he is committed to your debt!

Easier said than done. So how do you broach the topic?

Ideally, you should have done it before sauntering down the aisle. But having conveniently missed that bus, hop on now. Be upfront about your financial history. If you have incurred debts at obscene rates and have been a delinquent payer, s/he has a right to know!

It is imperative that both of you disclose as much as you can about yourselves financially -- current earnings, debts and potential inheritance (that is the only piece of baggage your partner will shoulder willingly).

Quick Pointers

• While you are being honest, be clear and articulate. When you say, 'I am in a debt trap,' let him/ her know the nature of your debt -- student loan, family obligations, obsessive buying patterns. Having aired your baggage, elaborate what loan/s you have taken, when and at what rates. 
• Let him/ her know that you want to clean up, too. Create a debt eradicator plan. For this, you will first need to determine your compulsory (home rent, insurance premium, medical expenses, groceries, etc) and discretionary (the home theatre, for example) expenses.

Let your partner know you are aware of your responsibility and don't consider it your birthright s/he will bail you out.

• In debt, but want to save? Read this!

2. Identify your currency personality

You think debt is salvation, she thinks it is Satan commoditised. Time to let the rose petals fall, because both of you are booked first class on the next flight to financial splitsville!

Marriage is as much about money and expectation management as it is about managing different emotional personalities.

Let me walk you through the financial saga of Raj, 31, a high net worth relationship manager at a bank, and Melissa, 29, an architect.

She thought his spending was reckless and irresponsible. Every credit card bill conjured visions of them in throes of financial distress. Raj, who came from a family of bureaucrats, was used to worldly luxuries and considered her constant nagging restrictive.

The result: marital blues.

Identifying your personalities, even if they are polar opposites, will help you plan around your differences or similarities. Determining how you plan to allocate and combine financial resources can be a very touchy issue, but it must be addressed.

Quick Pointers

• Identify the category you belong to: flirty spender, committed hoarder or somewhere in between. Having identified your individual personalities, segregate your expenses into personal and household.
• Remember (this applies to the spenders): while your contribution to paying the household expense budget is mandatory, the personal category expenditure is solely and wholly yours to splurge. But that is a lesser kitty to fall back on in times of dire need. And, no, you cannot paw your spouse's kitty!
• Keep separate credit cards. I have learnt this the hard way. When I am responsible for my own income and expenses, I manage well within my limits.
• Have a constant review session. It is a great excuse to curl up and escape from the drudgery of the daily grind, yet keep both in the loop about the current status on the personal expenses front.
• How I missed making a killing in the market

3. Manage money daily

Decide on the daily treadmill for managing your financial affairs.

Will you keep separate bank accounts and dice the bills that each will pay proportionately? Would you prefer the comfort of a joint account? Every choice has a tradeoff. Perhaps you could have both.

Ravi, 28, a freelance photographer, and wife Pratiksha, a personal trainer, 29, have a different approach: for one quarter of a year, one of them dons the hat of house accountant.

Job responsibility of the accountant: to manage the expenses and investments of the couple. At the end of the quarter, they flip hats. They believe this helps them both understand the nitty-gritty of home finance and juggle the burden periodically.

Quick Pointers

• Open a joint account that you both will contribute to for household expenses. But maintain separate personal accounts, which gives each of you some spending freedom, as well.
• Get your dusty drawing board out. Chalk out a budget: how much money flows in and out of your household? Besides living expenses, it should include savings and investments as well as an emergency cash reserve.
• Zero in on the amount you need to keep aside for an emergency. Believe me, you do need these money pockets. Life can get very nasty!
• Finally, don't forget to allocate Treat Money for lunches, movies and presents. Else you may leave a trail of credit card receipts.

At any point in time, both partners should be aware of all joint expenditures and have access to all joint records and notices.

• Smart ways to manage your money

4. Financial dependency

As a couple, you now function as a unit that typically creates some amount of financial dependency. Have a unified approach to savings. You can obviously save more than single individuals.

First, review your insurance. Are your under-covered or over-covered? If you are on track, please change/ add beneficiaries to your existing policies.

If you are planning to buy a home, give serious thought to the title deed. Putting everything in joint names works well by allowing quick transfer of property to a surviving partner.

Since couples accumulate wealth, it may not make sense from the taxation angle.

Quick Pointers

• Post marriage, change your beneficiaries. Go through all your investment accounts, savings accounts, insurance policies (life, health, auto, home owner's) and other accounts. Review your beneficiary designations.
  
• 10 questions on joint home loans answered

5. Team up!

It is important to know where you stand financially as a couple. That is the first rung of the ladder you need to climb to achieve your financial goals, like buying a new home, those luxurious jaunts to Mauritius, that sabbatical you have been dreaming of to write your racy thriller, even retirement, if you are both visionaries.

Quick Pointers

• Get a snapshot of your financial statement. Use bank statements, investment statements, credit card statements and other documents to list your combined assets and debts.
• Determine your actual cash flow: how much money actually comes in; how much must be spent and saved. By learning where you both spend your money, you can quickly identify ways to reduce your spending to save more for your long-term goals.

Remember, Cupid only walks with us till the vows are exchanged. Financial darts are not part of his standard work accessories. Those are part of your life.

Be patient. It may not be a very smooth ride, but it helps to be in control of your financial life.

Have you and your spouse worked out your financial issues successfully? Would you like to share them with others? Or suggest a few tips? We would love to hear from you!

Illustration: Uttam Ghosh