The decision to get married may be the single-most important choice that a person takes over the course of life. It is certainly not one to be taken lightly, and financial planning is essential to build a successful life after. There can be a lot of variables that impact expenditure for a new family. Understanding what they are, prioritising what is important and making firm decisions is important in having a life that is financially stable  and fulfilling.

1. Make a list of what is important to both the spouses

It is important to understand what is relevant to both spouses i.e having life plans. A life plan aligns your interests/passions to your spending/investing and saving habits to help you live a fulfilling life together. One may like to spend on an area which the other may not consider relevant; however it may be useful to the family.

My advice to couples is to follow the SHAADI diktat for financial planning:

S - Set objectives

H - Have a spending/investing plan

A - Act on the plan

A - Adapt to changing circumstances

D - Develop knowledge about finances

I - Increase income

This helps establish priorities and build a strong foundation for the future.

2. Make a budget and stick to it

Once the first step is done the budget can be made based on fixed expenses, like electricity bills, maintenance/rent, grocery, medical expenses, mobile bills, mediclaim, and insurance. Variable expenses such as travelling, eating out, shopping, savings can be adjusted.

The way to implement it is Income - Savings = Expenses. Once initiated on that basis many things become easier from a longer term point of view. For e.g. If one earns INR 1 lakh per month and needs a saving of INR 30,000, then expenses need to be aligned accordingly to achieve the goal.

The reason most budgets fail (like most diets) is that they are not much fun to implement. Making a  spending plan in order of what is fun and sticking to the limits is a good way to ensure savings are in place. Eg: The household income is INR 1 lakh per month. Your spending plan is INR 15,000 on fun activities per month. It creates a trigger in the mind to stick to the plan. If you like to travel then you might want to allocate it towards that or you might want to save for that iPhone you have in mind.

3. Increase passive income

There are certain expenses which are variable like travel expenses. It can take care of the increase in expenses which happens post marriage like socialising, buying the latest smartphone.

Some relevant options are -

• Liquid funds: One has the ease of withdrawing the funds without exit loads. Generally for most liquid funds exit load is not applicable after one week.The interest can take care of regular recreational expenses like eating out, going to  the movies and travelling.

• Equity funds: Given the current tax situation it is very difficult not to pay long term capital gains tax if one has a sizeable portfolio. The government has given an exemption of  INR 1 lakh per annum per person for long term capital gains tax basis applicability. These options can be considered by couples to achieve aspirations financially and have a good future.

4. Start a financial date

In many Indian households one partner does not know about the financial savings of the family. It creates a vacuum, as in if something were to happen to the spouse then the other spouse may not know where the savings are deployed and can result in a loss of family savings. It is necessary to have a financial date once/twice in a year to review finances and see whether the ship is moving in the right direction and at the needed pace.

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