Marriage is the time one would like to indulge a bit. However, it
is also the right time to take firm grip of your money matters. Here are some tips for
A philosopher once said that there are 10 ways to impress one’s spouse.
The first one is to spend an excessive amount of money. If you can do that, you can then forget the next
nine. In most cases with newlyweds, this advice is taken literally. The last thing on the minds of newly
married couples is financial planning. There is nothing wrong in a bit of indulgence at the start of
your married life, but when it becomes a habit, expenses that were once small holes in your pocket
become gaping pits.
Here we will discuss a few pointers that can be used by newlyweds to plan
Planning your financial life
Let us look at some of the important things you need to do immediately
Make a budget for expenses: After the honeymoon is
over, make a budget for discretionary expenses such as eating out, going to cinema, and traveling. These
expenses can be controlled to a large extent if you work in a planned way. Moreover, you will relish
going out for cinema or eating more because it will feel like you have earned it with your financial
At the same time, avoid buying too many clothes and gadgets that people
hardly use for long. Many newlyweds buy apparel and clothing almost every month, which goes out of
fashion in 6 months. A healthy social life needs to be balanced by financial prudence.
Make a habit of saving and investing every
This is extremely important. It does not matter what amount you save and
invest, but it is important that you do. Saving and investing regularly builds financial discipline
early in life, which keeps you in good stead in future.
Starting early after the marriage will help you build a larger corpus for
your future needs. The difference of 5 or 10 years in your investment horizon can make a huge difference
to the corpus you are building.
Set a target and reward yourself on achieving
Human nature is unique. Even when you own a company, giving yourself a
bonus from your own company feels good. This is similar to the euphoria taxpayers experience upon
receiving income tax returns, despite the fact that it is their own money to begin with.
Nonetheless, it works. So, set yourself a financial target and reward
yourself on achieving it. For example, you may set a target to save Rs 1.2 lakh in a year and go for a
vacation worth Rs 20,000 on accumulating the targeted amount. This will encourage you to save
Take medical and life insurance
Most newlyweds tend to ignore medical and health insurance in the
beginning. They realise the importance of having it when they encounter huge expenses in a medical
emergency. Take health insurance early in the life—it is much cheaper when you are younger. This is the
case with term insurance as well. The premium is low when you are younger.
Learn investment & tax
There is no substitute for knowledge. While it may be impractical to
become experts in investment, still attempt to have a fair idea about the types of investment in the
market, the risk and reward associated with it, and the time horizon. Even when you spend an hour per
week learning about investment, this will help you steer clear of decisions that could possibly erode
Other important financial aspect of your life is taxes. Use the tax saving
instruments provided by the government. Taxes can save you a lot of money if planned properly in
advance. Do not resort to last minute decisions for filing your taxes—you may end up investing in assets
in which you lose your money. Instead, make tax planning an integral part of your financial planning
Options available for investment
Newlyweds have a long life ahead. Hence the large investment horizon makes
it possible to invest in assets that perform well in the long run. Let’s take a look at some of the
Equity mutual funds: Equity mutual funds invest in a
set of companies based on a theme. The theme could be a diversified one or based on sector or size of
the firms. Equity mutual funds are market-linked. Hence, investments in equity MFs can experience wild
fluctuations in the short term but will reward you handsomely in the long run.
Safe instruments such as PPF, EPF, FD, high grade bonds:
These are risk-free investments, where you know the interest rate beforehand. However, the
returns can be lower compared to an equity fund. Invest in safe assets if you are risk averse. However,
you should not invest all your savings in these assets. Invest a part in it; the rest can go to
Balanced funds: Balanced funds are combination of
equity and bonds. This makes them less riskier than equities and riskier than safe assets. Other
investments: There are other investments such as gold funds, index funds, corporate deposits, government
schemes, and tax saving instruments that you can opt for based on your investment horizon and risk
The most important aspects about financial planning that newlyweds need to
focus on are: start early; and instil financial discipline in self. Once bad financial habits are
formed, it is difficult to get rid of them. Instead, choose to inculcate the right habits and live the
rest of your married life devoid of financial worries.