Many new couples face financial problems right from the very start. To some, the road ahead may seem calm and bright, but realistically, you have to be ready for unforeseen financial circumstances. Not everything happens the way it is planned especially with money.
Bear in mind that financial problems that come along are always a great learning experience. Here are 7 tips on how to make wise decisions at the very start of your marriage:
1. Start discussing your financial status
It's an awkward topic but you need to be open right from the very start. After settling into your new home, set aside a few hours to talk about how both of you feel about your own finances. Begin with one money-related question at a time. It is important to discuss how much you are both willing to spend and keep.
2. Acknowledge cultural differences
This is especially true with interracial marriages, where both people were brought up in two different countries, cultures or societies. How one feels about money may not be the same as the other, and this may include supporting the immediate or extended family. Understanding each other's norms should be done before getting married so that both parties can set expectations and limitations.
3. Create financial goals
Present both of your bank statements and other financial documents so you can start planning how much you would like your money to grow, what adventures you want to go on, and which possessions to buy. Your goal should be time-bound. Can you afford to replace your car after five years? Do you both want to own a home? How much do you plan on saving per month?
4. Set aside an emergency fund
It is a must that a certain amount of money is saved for a rainy day. This is a cushion of at least three months' worth of living expenses, which couples can use during health emergencies, temporary job setback, and other calamities.
5. Divide expenditures accordingly
Create a budget and stick to it. Avoid comparing incomes. Marriage is supposed to be team work, so who generates more money should not be an issue. What is important is that both work together to make sure all needs are met.
6. Consider important decisions, like having kids
Factor in your financial decisions not only on how many additional members would be in the family but also the type of neighbourhood you will choose and the size of the home. Will there be enough time to prepare? Should you start child-proofing your home? Will you buy a sedan or a family car? It's best to know all these things, before the bun is in the oven.
7. Make sure both of you are insured
Aside from your emergency fund, a will and sufficient life insurance can protect you from potentially damaging financial repercussions. You can both create a will and ask an expert to help you figure out your life insurance. What is important during marriage is that you both establish at least a bare minimum of legal and fiscal security, in case something unavoidable happens. Read about how to write a will in the UAE here.