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Dear Qualified Financial Advisor,

I’m planning to get married later this year, and while preparations for the big day have already started, I find myself thinking about how my spouse and I will manage our finances once we’re married. As a woman, I’ve always valued and worked towards my financial independence. But I’m not sure how things will change once I get married — like if we need to share a bank account, and align our budgets. Or do things largely stay the same? I’m a bit confused about how to approach this. Any advice would help!

A Soon-to-Be Newlywed

Dear Soon-to-Be Newlywed,

To begin, please accept my heartiest congratulations on your momentous life decision. Once you’re back to routine life after your wedding, you’ll want to get started on your paperwork. Do ensure that you apply for your marriage certificate within six months. Meanwhile, decide whether you want to change your name or keep your maiden name. In case you wish to change it, make sure that once you receive the marriage certificate, you submit the relevant documents and change your name on all government IDs.

Usually, a newly married couple has a lot of people to meet together. So for the first year post-marriage, there might be lot of expenses on gatherings and gifting. As a couple, you should set aside a budget for this.

In a broader sense, to maintain better financial control, it is important to not lose sight of your own financial future but tweak your financial plan with clear goals in sight. The next step, thus, is to assess the current state of your finances and set a new budget with future expenses in mind.

Once you have a budget in place, chalk out a financial plan that takes into consideration financial ambitions at various life stages — such as vacations, medical expenses, purchasing a house and vehicle, and your own long-term goals, like retirement. While it’s crucial to keep long-term goals in sight, life can take unexpected turns. So, another priority is to build an emergency fund simultaneously.

As a couple, you should have at least three bank accounts — two salary accounts (one each for yourself and your spouse) and one joint account. All personal expenses like shopping, travel conveyance, bill payments, etc. are to be incurred from your salary account. All shared expenses, like EMI payments (if any), home maintenance, groceries, vacations, parties, etc. are to be made from your joint account. Through this exercise, you will have clarity on your personal and joint expenses, which will help with budgeting.

Finally, start investing small amounts on a regular basis. This can contribute towards your financial goals — like having a corpus for your vacation, gadgets, medical expenses for yourself, your dependents and parents, a new house, a new car, retirement, and so on. Top up your investments with any bonus income and incentives, whenever possible.

Make a plan for where your money will go. For example, if your monthly in-hand salary is ₹1 lakh, and your mandatory and miscellaneous expenses are ₹60,000 and ₹2,000 respectively, and you pay an insurance premium of ₹3,000 per month, you need to prioritise long-term goals. These may include retirement (say, ₹5,000 a month) as well as medium-term goals like buying a house or car (say, ₹10,000 to this goal), and short-term goals like an emergency fund, a vacation or buying a new gadget (say, ₹20,000). These are estimates that will vary depending on context.

If you are planning your finances for the first time, you could consider starting with the “50:30:20 rule” — wherein you set aside 50% of your income for essential expenses, 30% is allocated towards lifestyle expenses (this includes your insurance premium), and 20% is put into investments. As you get more familiar with the process, you can tweak your income allocation based on your financial goals and lifestyle. Your partner can plan for their finances in a similar fashion. This will help you be prepared for a secure future together.

Charmi Shah

By Charmi Shah

Co-Founder, Torient Services

Charmi Shah is a Certified Financial Planner (CFPCM) and Chartered Wealth Manager (CWM®) with over a decade of experience in providing financial advice.

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