Now that the wedding's over, it's time to open your gifts. A large chunk of it is likely to be in cash. The first impulse after counting all the gift money is to just go ahead and spend it. You had planned to buy a regular 21" TV, now you want to take one with a larger screen or an LCD version.
The options are endless and the desire to 'live it up' enticing. But marriage is a long haul and you can stretch the time your wedding gifts stay with you by investing the cash you have received for the long term.
A key factor to consider is whether both the partners are working or the new household has to be managed on a single income. The first thing to do is to make a list of expenses (regular as well as one-off) that you expect to incur. You are just beginning to share your life with your partner, so it is advisable to add a buffer to the initial estimates.
While you should retain your individual bank accounts (this is especially necessary from the point of view of convenience in paying tax if both the partners are working), you need to open a new joint bank account and deposit the wedding receipts in it. Settlement of wedding expenses (if you were lucky to get a credit) can be made from this account.
Before you go on that shopping blitz, leave aside two months' expenses in this account. This is to ensure that there is money for paying the flat maintenance charges even after the acquisition of that stunning flat screen. After about three months, you can reduce the buffer in the bank to one month's expenses, but only after making sure that the expense budget is realistic.
You can invest another two months' expenses in a short-term debt mutual fund, which can be encashed at short notice, but will earn better post-tax returns than a bank fixed deposit. A reminder: factor in the expenses on gifts that you will give your well-wishers and friends when they get married.
Now,
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