Ready to Say 'I Do'? Assessing Financial Readiness for Marriage
2023-09-27

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Finding the perfect partner to share your life with is a dream come true. But before you dive headfirst into marital bliss, it's important to ensure that you and your partner are financially prepared for the journey ahead.

After all, money matters can be a significant source of stress and strain in a relationship. To guide you through the path of financial readiness, we have gathered insights from Joseph Tan, a seasoned Financial Services Manager at ACQUITY, renowned for his expertise in helping couples learn how to be financially ready before you say the magical ‘I do’. 

So, for starters, let us explore some ways to gauge your financial readiness for marriage and set yourselves up for a stable and secure future together.

1. Securing a Strong Foundation
   We all dream of a magical wedding day, but it's crucial not to let it drain your financial resources completely. Aim to set aside enough funds to cover the wedding expenses while still having some left over as a rainy day fund.
   Life can be unpredictable, so having a financial safety net to cover at least three months' worth of expenses in case of an unexpected job loss or emergency will provide you both with peace of mind.
2. Building Your Future Home
   As you embark on this journey, envisioning your future together is only natural. If you plan to buy a house, having a decent amount for renovations or a down payment is crucial. Acquiring a loan soon after marriage can add unnecessary stress to your relationship. A stable financial footing will allow you both to nurture your love and focus on building a life together.
3. Ensuring Protection and Security
   As you tie the knot, your legal and financial rights change. It's vital to ensure you have a proper insurance policy that covers you and your spouse in case of unforeseen circumstances. Understanding and securing these policies will provide you both with peace of mind, knowing that you're protected in the face of adversity.

Evaluating Individual Financial Situations

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Money management is an important aspect of any successful marriage. Take the time to evaluate your individual financial situations and openly discuss your expectations with your partner. By examining your income allocation, you can gain insight into your spending habits and financial goals. Consider how you allocate your income across three key aspects:

1. Pure Consumption: This will be what you spend your hard-earned money on – living expenses, leisure activities and entertainment. Aim to allocate no less than 50% of your income for this purpose but be cautious not to exceed 70%. Finding a balance between enjoying life and saving for the future is key.
2. Protection of Wealth: Buying insurance may not be the most exciting topic, but it's crucial for financial security. Devote around 10% to 20% of your income to insurance policies that cover life, health, and property. It's a small investment that can save you from significant financial setbacks.
3. Accumulation of Wealth: Saving and investing are the pillars of financial growth. Allocate a healthy 20% to 30% of your income towards savings and investments. As you accumulate wealth together, you'll build a strong foundation for a prosperous future.

Considerations for Merging Finances or Keeping Them Separate

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Here are a few joint accounts you should consider having:

1. Joint Emergency Account: Create a joint emergency account where you can contribute funds and build a safety net. Consider placing this money in a fixed deposit or another low-risk investment to ensure it grows over time.
2. Joint Expenditure Account: Consider managing day-to-day expenses jointly to promote transparency and avoid conflicts over money. By sharing financial responsibilities, you can work together as a team towards your shared goals.
3. Joint Savings Account: Having a joint saving account can foster financial unity and enable you to save for future goals together. You may even explore joint investments to grow your wealth collectively.

Addressing Financial Responsibilities

Avoid lopsided asset allocation, as it can create resentment and strain the relationship. By addressing financial responsibilities openly and honestly, you can create a solid foundation for a harmonious and balanced partnership.

Seeking Professional Advice and Resources

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Navigating the intricacies of finances can be daunting. Seeking advice from a certified financial consultant can be incredibly beneficial. Look for someone whose values align with yours and who embraces a gender-neutral approach to financial planning. With the right guidance, you can create a shared financial vision that aligns with your dreams and aspirations.

Say “I do” to Financial Readiness Today

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Financial readiness is a crucial component of a successful marriage. By assessing your financial situation, aligning your goals and seeking professional advice, you can set sail on your marital voyage with confidence. 

Consider reaching out to Joseph Tan, an experienced Financial Services Manager at ACQUITY, renowned for his assistance in guiding soon-to-be-married couples through financial planning. Connect with him at 9853 0208 for valuable advice on being financially prepared before marriage.

So, as you prepare to say "I do," don't forget to say "I do" to financial readiness as well.