Tuesday, May 04, 2021
The National - Marriage and money: Top tips for newlyweds to find financial bliss
Vijay Valecha , Special to The National May 4, 2021
When Tripthi Tharoor and Nikhil Ravindran were married in August 2020, their wedded life got off to a rocky financial start because Mr Ravindran had lost his job just a month before their big day.
It didn’t help that Ms Tharoor, 26, a flight analysis co-ordinator, was also paying her MBA fees every month and had her salary cut as a result of the financial impact of Covid-19.
“In 2020, after the deductions for my MBA fees and Covid-19-induced salary cut, I was basically earning next to nothing. We faced four months of financial struggle,” Ms Tharoor, an Indian expat, tells The National.
However, their situation began to improve when Mr Ravindran, 30, found a job as a procurement engineer in December and Ms Tharoor's salary was restored to its original level earlier this year.
“From December 2020 till February 2021, my university payments continued to be deducted and we were living on my husband’s income alone. From March, I have been getting my full salary and we are back on track with our finances,” she says.
Ms Tharoor says she is a saver and managed to keep aside most of her income while living with her parents until the wedding. Her then-fiancé had more expenses because he was living alone.
However, before the wedding, the couple had an honest conversation about how they managed their finances, with Mr Ravindran admitting he was a spender. They decided that the responsibility of saving would be handled by Ms Tharoor, and Mr Ravindran would transfer money to her account every month to prevent him from wasting it on unnecessary purchases.
Financial experts say it is vital for couples to have an honest money talk before saying "I do". This includes being truthful about their current financial situation, debts owed, spending habits and goals for retirement or buying property.
Ms Tharoor and Mr Ravindran have maintained separate accounts after their wedding and also have their respective car loans as well.
“We were quite open about what we were earning and our monthly expenses before we got married,” Ms Tharoor says.
“We balance each other. The experience to manage finances as newlyweds can get challenging, especially if your spouse has different spending habits.”
She says that managing a house, paying for groceries and other related bills is a different experience compared with life before their nuptials, when she wasn’t accountable to anyone about her finances.
Ms Tharoor and Mr Ravindran do not divide household expenses equally, however, there’s a tacit understanding between them that bills need to be paid.
“I take care of some costs, while my husband pays the remaining bills. Or, if he has spent a big amount in a particular month, then I take care of smaller expenses to support him,” Ms Tharoor adds.
If one spouse’s costs are going overboard in a certain month, there is an open discussion to cut down on social expenses to maintain a budgetary balance, she says.
The couple eventually plan to migrate to Canada and are now saving to have enough funds to make the big move.
A Couples & Money study conducted by financial services company Fidelity Investments in 2018 found that seven in 10 couples generally communicated very well with their partner about finances, while one in four said they communicated exceptionally well. Furthermore, two thirds of couples indicated they discussed some aspect of their finances at least monthly, according to the survey, which polled 1,662 couples aged 22 years or older in a married or long-term committed relationship.
More than half of married couples carried debt into their relationship, the study revealed. Of those who carried debt into the relationship, approximately four in 10 said it had a negative impact.
When it comes to marriage and money, experts say honesty and a system of checks and balances are key to reaching long-term financial goals.
“Many couples don’t disclose their financial obligations or spending habits early on. It’s a big issue,” Stuart Ritchie, director of wealth advice at financial services company AES, tells The National.
“Things like debt and credit cards are concealed and slowly exert pressure on the relationship over time. Transparency is the cornerstone of any successful relationship – you should be as honest about your finances as with everything else in life. Take the time to sit down and lay all your cards on the table.”
Sagarika Badyal and her husband Kartikay Aggarwal believe it’s important for spouses to have honest conversations about debts.
The couple, who tied the knot in March 2020, have separate bank accounts, although they have considered setting up a joint account. They contribute an amount that is proportionate to their salaries towards meeting family expenses.
“We didn’t have a money conversation as such before getting married, but we have been on the same page about saving and making sure we had enough liquidity for a rainy day,” Ms Badyal, a 30-year-old consultant for an oil and gas company, says.
The couple do not have any debts and are particular about paying their bills on time.
Although Ms Badyal has not invested in any assets as yet and her earnings have accumulated in her bank account, Mr Aggarwal, a 32-year-old Indian expat who works as an actuary at an insurance company, has been investing in the Indian stock market for the past few years.
“I am a spender and he is a saver. I spend on household stuff and clothes whereas he spends on technology products such as an Apple TV or a new sound system. But, we always consult each other before making big-ticket purchases like a TV or an iMac,” she says.
The couple are currently saving to buy a property in the UAE.
Setting up joint investments and retirement plans are a good way for couples to establish trust, show their commitment to one another and plan for the future together, Mr Ritchie says.
“However, merging finances can be scary for some. After all, if something bad happens to the relationship, how would you decide what’s mine and what’s yours?” he adds.
There’s no one-size-fits-all approach – some couples combine it all, others do not merge finances at all, or have a combination of both with separate and shared accounts.