Recently by Brother-In-Law got married. Though he manages his finances well still he asked me to help him with the financial advice i.e. how to go forward with finances as a newly weds. Though I am not a financial planner, still after being married for more than 4 years and studying personal finances, I have given him some tips which I think is useful for him.
PC: Pixabay.com
One thing to note here is my brother-in-law and her wife both are working so for them it is about combined financial journey which is different than mine as because my wife is a home maker. It is different because when both are working both have to share the expenses and both have to discuss their finances and invest as an individual or as combined.
To start with, I have advised them to discuss before investing. In my case sinc my wife is a home maker and I am the one who invests. I usually tell her that I am going to invest this much amount every month to so and so assets. I also tell her about the health insurance, term insurance and life insurance which we have. But in my brother-in-laws cases since both are working they have to discuss before investing. Why because you don't want to waste money on having two health insurance or two life insurances. The also have to discuss about their future plans, what if one of them wants to study further than how to manage their expenses or what if one wants to take a break.
PC: Pixabay.com
As of now everyone is working from home so the expenses will be too less, but since both of them have their offices in Mumbai, they also have to plan out the budget once they start going to office and have to rent out the place to stay. Why because, in India, Mumbai is one of the expensive city to live in because of the house rent itself.
Next I advised them to pay off any loans if they have. They might have taken personal loan for marriage or anything, so its better to discuss about it and pay off the loan as soon as possible before starting the investment. Its also better to list down the savings, investments and insurance of both and them and then invest on the assets which they feel would be better in future. Both of them have heavily invested in Mutual Fund, so I have asked them to link the investment to a goal so that its better to track them and thus invest as per the goal after prioritizing the goals. Both of them might have some goals, its better to list them and prioritize them so that they can invest in those goals together and achieve them.
I have asked them to create an emergency fund too. Since both of them working its highly unlikely that both of them will be out of job at a same time. So emergency fund of 3 months of combined expenses will be more than enough for them. I have told them the importance of emergency fund and asked them to work on it as soon as possible because that's the first baby step of financial planning.
Next is insurance, since both of them are working they can add the spouse to the health insurance of the company. Then they will have two health insurance running and thus taking outside health insurance is not necessary. I have also asked them to include the parents too in both the insurance. Then the term insurance, they have the individual LIC running and since both of them are working so taking a term insurance now if not required. They can think of it once they have a kid or in future.
Since all the above things like Emergency Fund, Insurance are the necessities of financial planning. Then comes the investing part. Since both of them invests in Mutual Fund that means they know the power of compounding and thus the only thing I have asked them to create Goal and attach the mutual fund portfolio to the goal and prioritize those goals and work towards those goals by investing in it.
These are some of the advices I have given, and they have started working towards it.
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