I’m sure you have heard of it. Madonna and her beau, Guy Ritchie, have gone their separate ways after eight years of marriage. Divorced. And there’s a huge settlement in her ex-hubby’s favour. He’s reportedly walking away with assets worth around USD60 million which includes a 1,200-acre country estate, a London pub and a cash settlement.
Very few of us can be a Guy Ritchie or a Madonna or one of the several thousands of celebrities who have millions of dollars’ worth of assets to share among themselves or their lawyers whenever they get hitched or ditched.
For us, planning a wedded bliss together may require some pre-wedding financial planning as well. It’s always prudent to sit down with your spouse-to-be and talk frankly about money and expenses. What can you talk about?
1. The accounts you have. What types are they: current account, savings account, fixed deposits? How long have you had them? Start an inventory of the accounts you have and how you handle them.
2. The credit cards you have. How do you use them? What’s the balance in your credit cards? How do you repay them?
3. Bank loans. Do you have any bank loans to settle? Housing loan? Car loan? Study loan?
4. Should you have separate or joint bank accounts?
5. How will you make buying decisions? What purchase decisions should be made together and which should not? Should there be a limit to spending without joint decisions and if so, how much?
6. Who is responsible for the marketing, paying household bills, utility bills and preparing taxes? Should there be separate assessment or joint assessment?
7. Do you work benefits overlap? Do you have insurance: personal insurance, medical insurance, home insurance? How about investments: mutual funds, stock market? How about the degree of risk you are able to live with?
8. What are your money goals? Retirement planning?
Asking these questions early on and starting the conversation before you sign the marriage certificate will make it easier to revisit money talk, which may not be as fun as pillow talk but is certainly as vital to your relationship.