Money, money, money… money!

Money is sweet. However, if not managed prudently, it can break a marriage, writes PETER KAMURI

One of the most anticipated and blissful moments for any bride or groom is the exchanging of wedding vows. It is a time of great expectancy. However, as the excitement of the union dies, hard reality begins to bite, as the couple must make critical financial decisions.

Indeed, you cannot talk of marriage, and divorce the money element from it. This is a critical component and can be tricky if not handled well.

As a newly wedded couple, you must start off on the right footing, or else the relationship will be rocked from the start. This can only be achieved through good financial planning, founded on honesty and openness.

A newly wedded couple should ensure they come up with a workable solid financial plan. This will help the couple develop budgets on how they expend resources and draw a map for investing.

As you start drafting your financial plan, you must be aware that it is mainly a two person’s task. Create time with your spouse and share ideas on what you want included in the initial plan. It is a shared activity and each one must contribute openly.

Money is a major cause of disagreements in marriage. However, if you want to have a blissful union, you must be prepared to start your life on the same footing.

This is only possible if you stick to a few financial rules:

To start off, review your financial goals. Before you got married, each one of you had his or her own financial plans, which must be reviewed to determine those which are shared or in conflict.

If, for example, one of the spouses had planned to buy a home, such an idea can be shelved if the other one already has one. You need to look at the financial plan each one had, which could be about buying a new car, reducing debt or going back to school. What should follow is the setting of new goals as a couple.

Draw a budget

To succeed in setting realistic goals, you should split them between long and short-term financial goals. It is important to have the goals written down and reviewed regularly. To be able to realise the set targets, discipline and commitment is required.

The other thing that you need to do is work out your combined net worth. As you start off, it is important for you to know, as a couple, where you stand financially. You should both look at your bank statements and other documents that show your combined assets and liabilities.

Drawing a budget and living within it, is a critical aspect of prudent financial planning for the newly weds. You should start by determining how much is your income is compared to the expenses. However, you should be able to adjust accordingly to fit with changing situations like an increase or decrease in earnings.

Avoid overshooting your budget, as this can get you into debts. Do this by first reviewing your joint expenses over the last few months, to determine how much you have been spending and if you need to adjust. Do not forget to allocate money for emergencies.

 

Joint account

Where will you be keeping your money? This is a critical question. Will you keep several bank accounts for the various expenses? Will you run joint or individual bank accounts?

A joint bank account can simplify your financial management and create trust in a marriage. However, this does not mean it is out of order to keep individual accounts. It particularly works when there is no financial discipline.

As you plan to manage your finances prudently, both parties should be prepared to share responsibilities. It should not be a case of the husband or wife carrying the responsibility for the other. All should be involved.

Regular reviews should be done on an agreed period of time to ensure that you are on track. Ultimately, you must remember now you are a couple and are bound together. You might soon discover that you cannot talk of ‘my money’, but ‘our money.’