When Getting Married Meets Your Financial Plan

In the hustle and bustle that comes with planning a wedding and preparing to start a life together, couples may forget to have some serious conversations about their future family’s finances. Even adults who have been living together for years can be unprepared for the ways marriage changes your feelings of financial independence and how you and your spouse both relate to money. 

Don’t wait until after the honeymoon to have these five important financial discussions. 

1. What are our financial histories?

Couples who are ready to say "I do" probably have a basic understanding of how each partner manages money. But do you know your partner's risk tolerance when it comes to investments? How much debt is your partner comfortable with? Are you planning on having children? How much financial support do you want to give them when they come to the age to further their studies?

And more importantly, why does your partner feel the way he or she feels about money issues?

We all have stories, often from childhood, that influence how we think about money as adults. Sharing these stories with your soon-to-be spouse and understanding the money experiences you're both bringing into the marriage will help you guys have a healthy foundation to plan and make major decisions together.

We can do a Fiscalosophy profile for couples to understand if their beliefs on money are on the same wavelength or differ drastically. Doing so can help them understand each other better, especially on money-related topics that people tend to not dive deep about.

An example (part of) from a couple’s Fiscalosophy profile. We can see that they have a slightly different preference when it comes to savings and spending, with one not feeling comfortable with the current savings, and not as comfortable when it comes to the current debt situation.

If you would like to get your own fiscalosophy profile, you can click here. This is provided at our cost for you as a small gift to celebrate your marriage.

 2. How should we structure our family finances?

Should we combine our income, not to combine? Or it is better to pool together some but maintain personal discretion on how to spend the balance? This is one of the first money decisions facing newlyweds. 

If both are working, maintaining separate bank accounts can make things like managing direct deposits and collecting individual info at tax time a little easier. 

 Some may choose to open joint accounts for ease of management. Couples who do this feel like joint bank accounts help keep both on the same financial page. Seeing money move in and out of the same accounts, every month can also prevent any misunderstandings about household cash flow that could lead to bad surprises and major disagreements further down the road. 

3. A picture of the debt situation

This could be good timing to pull out your credit report (CTOS, CCRIS, or Experian Personal Credit Report) and put it side by side for a review. You are entitled to a free credit report yearly, but it may be useful for you to purchase the detailed one as it will review more insight into your debt situation.

You may not like the prospect were a few years into your marriage only you come to know that your spouse has been dealing with some debt issue. Seeing this as you guys step into this new phase of life can also help you plan well for your wedding. For instance, if one of you is already having some consumer debts piling up, you may want to revisit your initial wedding plan and avoid putting on more debt load to it.

Mismanagement of credit and debt issue is believed to be one of the major causes of financial stress and it can ruin a happy family. “Till debt do us apart” may not be a good line to close off your new chapter in life and with sound management and open transparency, you can erase the potential of this phrase from appearing in your storybook.

4. Do we have an estate plan in place? 

If one of us were to leave this world too soon, what is going to happen to the assets?

 In most cases, bank accounts, investment accounts, EPF, PRS accounts, and insurance policies, if you do not have a valid Will, not all of them will go to your spouse. Another question to ponder could be, should all be given to your spouse as the first beneficiary? 

Also, it is important to note that if you have written a Will before to your marriage, your marriage will automatically revoke your Will. You will have to re-write one after your marriage. 

If you have not, this may be a good time for you guys to plan it out. It makes sense that married couples should have an estate plan that includes, at a minimum:

·      Last Will and Testament outlining your last wishes and how you want your estate distributed to heirs. 

·      Your Debt Management Plan post your untimely death.

For your PRS, EPF, and insurance policies, if you have done nominations prior to your marriage, marriage will not revoke your nominations. However, you may want to reconsider if you now want to make your spouse your beneficiaries and it will be beneficial that you both do a review on these.

 Finally, make a habit of reviewing your estate plan together every year. None of these documents are set in stone, and they can all be updated should either of your wishes change over time. 

5. How will we share financial responsibility?

We understand that not everyone loves to dig into their financial planning. That's a big reason why many married couples let one spouse handle the money side of the relationship.

However, in our experience, couples who work together on their financial goals are happier with their long-term outcomes. And while no one wants to think about worst-case scenarios at the beginning of a marriage, both spouses need to be able to assume responsibility for the household's finances if one spouse is no longer able to. 

It may help if you guys were to keep a tracking work on how your family is progressing towards the important life goals, as well as monitoring key financial health parameters, such as family debt, debt-servicing ratio, savings rate, emergency savings, medical safety nets, etc.

We hope that when the wedding excitement has died down, you'll schedule some time to talk to someone who has experience working with couples together. Your honeymoon may be over, but our planning process can help provide for many more incredible experiences in the years to come.