High divorce rates used to be a common phenomenal in the west. This phenomenal has now caught up with Asians as well, and the divorce rates in Asia and many parts of the world too are now just as high as in the west. It has been found that one major factor leading to the high divorce rate is the issue of money or rather the lack of it. Many couples do not talk about money and money management before they get married. They were too preoccupied with the topic of love, intimacy and the enjoyment of been together; they were also busy with their wedding plan.
The sad truth is that after marriage, couples continued to avoid the topic of financial planning and money management. It appears that money is a taboo subject which often led to unpleasantness, arguments and misunderstandings between the spouses. The challenge therefore is for married couples to break through this barrier to seek financial planning advice and to learn money management together as a couple to work towards marital bliss and in the process work towards their financial goals and retirement.
Married couples must learn the basics of financial planning, which includes managing money together. Seeking the service and advice of a professional financial advisor will ease the financial planning process but if cost is an issue, working the steps listed below together as a couple will certainly be useful in their quest for a better control of the finances and a better understanding of each other.
1. First and foremost, know each other financial health. Many a time, couples do not reveal their finances to each other, thus creating an atmosphere of distrust and misunderstanding, which sometimes is amplified by the interfering in-laws. Having an open book will help the financial planning process easier.
2. Working through the budget for household expenses is of utmost importance. Joint contribution and responsibilities towards household expenses, especially if both are working spouses can create better harmony and understanding in the house. Do discuss each other spending habits but avoid criticism. Avoid dictating each other spending habits unless it is truly excessive. Joint contribution to a common fund for expenses and investments and having an allowance for each other for their other expenses would be the best arrangement to avoid unnecessary conflict.
3. Discuss the common financial goals such as tertiary education for the children, buying a bigger house, travelling round the world or early retirement. Knowing your common goals will help you lay out a workable and realistic financial and investment plan. As mentioned above, having a joint education fund as well as a joint retirement fund is probably the right direction to take. The financial needs analysis helps to provide the couple a clear picture of the financial path they need to take.
4. The low interest environment that is prevailing all over the world today makes investment into the financial market a necessary option if you are seeking financial freedom. Leaving your money as low interest deposits in the bank will expose you to the perils of inflation and insufficient funds for your retirement years. Therefore having the right financial education and a firm commitment by both spouses towards a long term investment plan is imperative in achieving the financial objectives.
5. Insurances play an important role in any financial plan, more so if the contributions for daily expenses are necessary from both spouses. Any unforeseen mishaps can make an enormous dent to the financial and investment plan if the contribution is reduced to only one source. The purchases of life insurances for both party, medical insurances and other insurances are necessary in managing risks that may wreck havoc to the serenity and security of a happy marriage.
6. Just like insurance, a financial plan is not complete with estate planning. It is an essential element for the security of your loved ones.
The statistics of the rate of divorce mentioned above is certainly alarming. If money issue is a major factor, then the emphasis on the right financial planning advice and the learning of money management for married couple cannot be more correct and accurate to bring the statistics down.