Essential conversations: Financial talks couples need to have before tying the knot

• It is important for couples to check their financial compatibility before marriage.
  
• The couple should discuss what kind of lifestyle they are looking for post marriage and whether their income is sufficient to sustain it.
  
• Before you get married, it's important to figure out how you'll handle any debts you or your partner may have.
  

In the whirlwind of wedding preparations, couples often forget the fine print of 'happily ever after.' In fact, while infidelity, incompatibility and miscommunication are leading causes of divorce, financial issues are also not far behind. Before diving headfirst into the world of shared bank accounts and financial decisions, here's a look at the pre-marital conversations that can save you from potential money-related meltdowns.

What is your money mindset?

It is important for couples to check their financial compatibility before marriage. Imagine one person is a big spender while the other loves saving for the future. This difference can lead to conflicts and misunderstandings.

By talking about money before marriage, you can discover these gaps and find common ground. For instance, you might both agree to save for a dream vacation or set aside money for emergencies. These conversations ensure that you're on the same financial page and can avoid financial stress and arguments down the road, making your journey together much smoother.

Is our income sufficient to take care of our lifestyle?

The couple should discuss what kind of lifestyle they are looking for post marriage. Before marriage their expenditure patterns may be different and it is also possible that a lot of their expenses are taken care of by other family members. After marriage responsibilities will also increase.

“They should ask themselves if their income levels are sufficient to maintain their lifestyle and also let them 30-40% of their gross income for future necessities,” says B. Srinivasan, director and founder, Shree Sidvin Investment Advisors.

He adds that other expenses will come up gradually. They may have a baby and it is also possible that she might take a break from the job. Otherwise, they should plan and try to change their expenditure pattern before marriage itself.

How do we plan our expenses and manage them together?

Start by looking at your total income as a couple. Then, break it down into categories like rent or groceries, utilities, and entertainment. It helps you understand where your money goes and ensures you have enough for essentials.

Choose a percentage of your income to save each month. This sets you on the path to reach future financial goals, like buying a home or going on a dream vacation, as a team. It's a great way to build a secure financial future together.

“Some couples split the expenses, some pool in the incomes. Either of them should work. Typically early on in the marriage couples split income and as the relationship matures they start pooling in incomes with one person taking the lead to operate on behalf of both,” says Bhuvanaa Shreeram, Co-Founder & Head of Financial Planning, House of Alpha.

Do we have enough savings for the marriage if we plan to fund it on our own?

A lot of people get married from their own resources. In that case, the couple should discuss if they can fund the marriage from their own savings. Now there are options to fund their wedding entirely out of a loan.

“Post marriage a lot of expenses will come up. If they create a liability at the time of marriage, it restricts their entire financial freedom,” says Srinivasan. So the couple needs to decide how much they are planning to spend on their marriage and whether they have enough savings for the same.

Do we have any debt and how will we handle it?

Be transparent with each other. “Fully disclose any existing debts, be it student loans, credit card debts, or personal loans,” says Shreeram.

Before you get married, it's important to figure out how you'll handle any debts you or your partner may have. Do you want to pay off the debt together or separately? It depends on the kind of debt and how much there is. Talk about it openly and agree on a plan that works for both of you.

“Understand each other's credit scores and habits. A good credit score can be crucial for future joint financial decisions like getting a home loan,” she adds.

It is vital to acknowledge that both partners carry individual financial aspirations. Open and honest discussions are key. Whether your goals involve homeownership, pursuing further education, or embarking on adventures around the globe, expressing and sharing these personal dreams is a fundamental first step.

By jointly establishing a priority list and understanding which dreams hold the most significance to both, you can chart a course and create a timeline to achieve these shared goals. Moreover, collaborating and supporting each other's aspirations, even if they differ, strengthens the bond and respect within your relationship.

While love is the glue that binds marriages, money certainly plays a supporting role. Like a quirky sidekick in a romantic comedy, money keeps things interesting. It can bring challenges but also delightful surprises. Hence it is important to discuss money matters before committing to holy matrimony.