Ten investing tips for newlyweds

Marriage is not only about sharing your dreams and aspiration, but also sharing your financial status with your spouse. Hence, understand that now you have a partner for life as well as financial planning. Therefore, set money expectations right and make financial goals together.

1. Talk about your financial goals and spending habits
As your spouse is now a part of your life, talk about your financial goals. Try to find out spending habits of each other. Check whether your partner is more inclined towards saving money or spending it extravagantly.

2. Assess your net worth
Determine your assets and liabilities. Assets will include savings, collectables, real estate and liabilities will include debts like mortgage loans, personal loans, credit cards. You can calculate your net worth by subtracting liabilities from assets.

3. Prepare a budget
It’s important to keep a track of your expenses for a few months and prepare a monthly budget. This will help you to check any unnecessary spending and save more for investment purpose.

4. Identify excess cash flow
In addition to the regular income, you have you can identify excess cash flow such as wedding gifts, an inheritance or surplus cash that you can invest.

5. Emergency funds
Unexpected expenses may prop up any time such as a job loss, family illness, natural disaster, or a major home repair. You should ideally save about 6 months’ worth of your household expenses as emergency funds.

6. Set financial goals
Determine your short-term (1 to 3 years), mid-term (3 to 5 years) and long-term (more than 5 years) goals.

7. Invest depending upon time horizon
For any financial goal, couples should look to match their investments to the time frame of what they hope to achieve. As your goal’s time horizon increases, your risk appetite increases accordingly and vice-versa.

8. Reduce taxable income
Section 80C of Income Tax Act, 1961 helps you get a deduction of Rs.1.5 lakh from your total taxable income, which means you can save more by paying less in taxes. You can avail this benefit by investing in ELSS fund which offers tax saving as well as wealth creation.

9. Review budget and goals
Review your budget every quarter and try to reduce your monthly expenditure. At the same time, prioritize and review your goals.

10. Take Adequate Insurance
Once you get married, it is important to review, update, and in some cases purchase insurance, including life insurance (to help protect your loved ones), health insurance, and disability insurance.