Live-in to Marriage - Changing Dynamics in a Relationship, The Financial Way

Sudeep and Sanjukta were best friends from school but never really lovers. After college, Sudeep moved to Bengaluru and Sanjukta to Pune. A few years later, both of them shifted to Delhi and it seemed natural for them to move-in together. Two years down the line, they got married. “Even today, we are more of friends than a couple,” said Sanjukta. The couple claim, the only thing that changed between them is their financial relationship.

“When we were living-in, our financial relationship was more formal. From rent to utilities, we divided all expenses equally. Even for movie or dinner dates, we always used to split the bill,” Sanjukta added. They maintained an excel sheet (this was before apps like Splitify and CostSplit became popular) where they would put down their daily expenses and at the end of the month, they adjusted whatever added up.

This dynamic, however, changed immediately after they got married. “Today, we don’t add up everything. Our financial relationship is much more relaxed,” she said adding, “Like Sudeep pays the rent and the car EMI while, I take care of the utility bills and daily expenses. Though the round off is more or less same but we don’t count every penny.”

Sandeep Bisht, Financial Advisor and Founder, FilingSamadhan, however, opined otherwise. Counting every penny works, because that way they can easily keep track of how much they are spending and how much they are saving. Despite the fact that both partners are working in this case, they should prepare a budget for every month and stick to it. “Moreover, if you have prepared a budget of Rs 50,000, always have a buffer of around Rs 5,000 to Rs 10,000,” he added.

Cautioning about usage of credit cards, he said, “It should be avoided for meeting daily expenses. And even if you use it, use it in a smart way. Keep the limit low around Rs 30,000 to Rs 50,000. And use it only during emergency.” For credit card, one has to pay an interest of 40 per cent, which is obviously an extra expense.

Mumbai-based Smriti and Jeet preferred to pay for their wedding instead of taking money from their parents. “I am very proud of the decision but what happened was I was not very well prepared for it and had to use all of my savings including my PF,” Smriti said.  

Just before marriage, in the in-between phase, to-be married couples need to think about few extra things, Bisht further claimed. “For meeting marriage and after-marriage expenses, they can divide their expenses in long-term and short-term basis. For short-term expenses, they can invest in recurring deposits and fixed deposits. This can easily take care of the marriage expenses,” he added. After marriage, the couple needs to plan for a house and other futuristic aspirations and for that they need to make long-term plans. An SIP mutual fund is most suitable for such expenses.

Since Smriti and Jeet have already exhausted all their savings, the couple started their investments afresh. Apart from medical and life insurance, they have invested in two different SIPs, which they plan to continue for a long-term. Meanwhile, for meeting their short-term aspirations, they prefer recurring deposit.    

“Besides this, they should purchase a term insurance policy. In fact, they should have done this before their marriage,” said Bisht.  The earlier you opt for a term insurance; more beneficial it is for you. For example, if a person buys a term insurance at the age of 24 or 25, the premium comes around Rs 7,000 to Rs 8,000 yearly. “They should now start planning for home and retirement. And for these, SIPs are best option,” Bisht concludes.