October 9th, 2013

For Better or for Worse


Getting married is one of the most important decisions you’ll ever make. Not only is choosing the right partner critical for your happiness, but saying, “I do” also affects your financial life in ways you might not realise. 

Marriage injects us with a reality for which we might be unprepared.  Getting intimate with your partner’s credit card debt and loans and spending habits might not be the ideal conversation but pre- nuptial planning and honesty can help mitigate some newlywed nuisances.

As clichéd as it sounds, a budget could help mitigate a couple’s stress. You both need to know how much the bills are and how the money is invested going to be invested. Otherwise,   as a couple you may find yourself not knowing what financial resources are.

Tracking your spending is critical to being financially secure.  Having tied the knot, it may be a good idea to set your financial priorities together.  Know what is important to each of you. One of you may want to buy a house while the other thinks saving for your retirement is more important. Seeking the help of a financial advisor can help you set your priorities so you don’t jeopardise your future together.

It would be worthwhile to put some of your money in an emergency fund as a cushion against unemployment or emergency expenses. By making regular subscriptions into the TT Income Fund, a short term investment vehicle (6 months – 1 year), which allows you consistent returns on your investment as well as easy access to your funds, couples can build savings towards  an emergency fund. 

Debt can take a toll on any marriage as each person brings their own debt. Wedding and honeymoon expenses must also be considered. Make a plan by dedicating a percentage of both your salaries each month to pay off existing debt.   Drawing a line in the sand and saying that your spouse’s debt isn’t your problem is not going to work because it can impact your peace of mind and financial strategy. Not being honest about hidden debt is considered financial infidelity by many people and such secrets can destroy a marriage.

Even as you bask in the afterglow of the honeymoon, the sooner a couple starts saving for retirement the easier your golden years will be.  UTC’s Pension Plus, the Individual Retirement Unit Account (IRUA) and the Universal Retirement Fund whose funds are invested in stocks, bonds and money market instruments are avenues to build your retirement savings over the long term.

So do you keep separate accounts? To mingle or not to mingle your money is perhaps one of the most important decisions the two of you need to make regarding your finances. Having separate accounts does not necessarily lessen the sense of unity in marriage but it could give each partner a sense of independence when it comes to spending. 

Changes in your life, such as children, can also impact your finances in the future. Couples should be aware of the importance of including children in planning their financial future. The UTC has engineered the Children’s Investment Starter Plan (CISP) and Student Investment and Protection Plan (SIPP) that gives parents a head start to building an investment plan for their children. The proceeds of your SIPP, like the CISP are invested in UTC’s Growth and Income Fund, so not only is this a long-term investment vehicle that offers increasing value through capital growth but income as well.

Here are some suggestions:

Be honest: Sit down with your partner before entering into any major investments and itemise your expenses. Additionally, be direct about where your priorities lie in terms of savings. Being honest about your financial goals from the start will prevent embarrassment later.

Keep no secrets: Get down to the nitty-gritty and ask yourself: Do I really believe I can keep my gambling debt from my spouse till death do us part? Probably not. So you better start revealing the details of your spending habits now.

Starts saving early:   Newlywed financing tends to devalue items like retirement funds, life insurance and savings. It’s never too early to start saving. Life insurance protects your loved ones’ financial security in the event of your passing. Savings protect against suffering life’s surprises.

Whether you’re single or married, the best thing you can do with your finances is determine your financial goals and decide on a plan that will help you achieve them. That, more than your marital status, will have the biggest long-term influence on your finances.