Love struck Nidhi and Sandeep while they were studying together at IIM-A and after 2 years of graduation and being together they decided to tie the knot. Even though they both earned a 6-figure salary and had been living together for a year, they never had got down to discussing finance matters. Three years into the marriage they ruefully look back and wonder how many fights they could have avoided if the details of money had been sorted out first.
Prathibha Gheewala, ex-principal Marriage Counsellor, Bandra Court, says, "Money is a very important subject to talk about amongst couples who have a love marriage because there is little involvement of the elders who usually discuss these matters."
Getting married for love doesn't make the big issues go away, and if you don't discuss them, you are setting yourself up for tangles. So here are 8 things a woman should ask before she walks down that aisle.
Future Vision
"Where do you see yourself in 10 years?" This question is the best way to start a money conversation. For example, does he want to start your own business or own a vacation home? Where does he see himself and the two of you together? This will give you an idea of his goals and how he plans to achieve them. It will also help you judge if they are realistic.
Banking
Should you be keeping joint or separate accounts or a mix of both? Have separate joint accounts, one for husband and wife and the other for wife and husband, even if one of them is not assessed for income tax. This may sound trivial but actually is of great importance for proper tax planning.
Keeping accounts separate also keeps a semblance of control over your own earning.
Finances of parents
Are either's parents going to stay with you? What is their financial status? Who handles the household finances?
All these are very pertinent questions that need clarity. If you plan to support your parents then, it needs to be made clear too. Simran Wadhwa, a young IT professional who got married a year ago says that she is the only child and always thought she would support her parents, but her husband is absolutely against it. "It would have avoided the bitter arguments we have if this had been discussed and settled before marriage. It is very important to me", she says.
Investments
Is he a conservative investor? Does he prefer bonds to equity? Does he have a retirement plan?
You need to discuss your current investments as well as your investment goals. There may be overlapping investments that will have to be reviewed. For instance if you both have high exposure to an aggressive equity oriented mutual fund, you may want to sell off some to keep the exposure limits.
Budget
Budgeting is not only for the middle class. 'Budget' doesn't have to be a boring exercise -- think of it as a means to reaching your goals.
You should also take this time to discuss other spending issues, such as how much each of you can spend without consulting the other. You probably don't want to discuss every Rs.100 purchase, but you don't want to come home from work and unexpectedly find a new Mercedes either.
Housing
Do either of you own a house? Do you plan to buy one soon? How large? What is the budget and how will you finance it?
Gheewala says, "Often a woman puts in her income into running the house and the man's income goes for paying loans and building assets. At the end of 10 years there is an asset on his name and nothing to show for her contribution. It is therefore necessary to purchase a house jointly".
Besides the security created it makes sense tax wise too. Swati Lanke, a practicing chartered accountant explains that the tax benefits are higher if the house is owned jointly in a 50:50 proportion. The tax benefit doubles if you take the loan jointly and you may even qualify for a larger loan.
Financial nitty-gritty
Who will be responsible for paying the bills and preparing the taxes? Do you both contribute to paying them? Who keeps the paper work? The person who is more organised and has more time must take up this task. Non-routine decisions have to be discussed.
Insurance
Does your employer pay for your group insurance? By how much should you increase your insurance cover after marriage? What riders should you take? Do you take family health insurance?
The need for insurance of a married person is different from a single one. If you are taking a housing loan then again a term insurance is needed. If you are going to start a family then you need to factor that in.
The author is a freelancer.
For more on marriage and money, log on to www.moneycontrol.com.
