Tying the knot? Be financially savvy
With the wedding of Prince William and Kate Middleton taking place on Friday, people are thinking fancifully of marriage. Who wouldn’t like the $48-million to play with that is the estimated royal wedding spend?
But lavish celebrations are one thing and sober financial considerations quite another.
One of the mistakes couples make is to take on new debt far too quickly. Because we view debt as the norm, we tend to borrow—even for a pricey wedding—and pay the money off later. While it’s nice to have a celebration to remember, at least some of that money would obviously be better spent on a deposit for a house, or a saving to put aside for children later on. Your family may pressure you to have a big wedding, but keep a cool head and point out the advantages of planning for the future.
If you’re going to tie the knot soon, have a sit-down with your financial adviser and consider what will happen once the wedding cake’s been eaten. Like it or not, we all have to think about how to protect our joint assets, for example, or what kind of financial support will be in place if one partner dies, or becomes disabled.
According to Alon Perlov, managing director of Genesis Advisory Services, newlyweds should consider life cover, as unpleasant as thinking about this may be. When you decide how much life cover to take out, look at what your liabilities would be if one of you were to die—bond repayments, car loans, credit-card debt all come into this.
You would want your partner to be left with enough income to maintain his or her standard of living, so you do need to sit down and work out what you simply can’t do without. Remember, too, that if you have children you must make provision for their education. If one parent carries this cost alone, it’s even more challenging.
The other mistake couples make is not to update their wills—or not to make them in the first place. When children are involved, this is even more crucial (and it may be you have step-children you’ll want to provide for, too). Children under 18 can’t inherit but a beneficiary nomination in a life policy supersedes a will, so it’s vital you don’t appoint minors as beneficiaries.
It’s great to focus on your big day, but don’t neglect the financial aspects of your new life together. They’re even more important.
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