MONEY QUESTIONS YOU SHOULD ASK BEFORE SAYING “I DO”

Marriage introduces changes in a new couple’s financial situation that affect all aspects of their life together. But before tying the knot and saying ‘I do’, there are some money questions that have to be asked. It’s not only smart move for the future of the marriage, but it is also a healthy way to engage in any new partnership.

More and more Malaysians are heading for an unhappily ever after as data from the Malaysian Department of Statistics show that the number of divorces in Malaysia have nearly doubled over the last decade. According to the Marriage Tribunal in the National Registration Department, nearly half of these marriages break down due to financial problems.

These financial issues usually stem from spouses failing to live up to their expectations and obligations. For example, if one is a compulsive saver and the other-half has a knack for spending excessively, this usually spells disaster for the relationship. So how can you avoid this? Well, here are some questions to ask yourself and your partner before walking down that aisle.

If you’re starting your life together in debt, be sure the both of you aware of it. Drag out all the financial skeletons and lay them on the table for both to assess. These debts can be in the form of student loans, credit card debts and any other prior obligations like child support or private loans.

Uncomfortable as it may be, an unexpected and expensive surprise down the road will most definitely be more painful for you compared to awkwardness of baring your financial history to your partner. Keep in mind that your debt — and your partner’s — impacts not just your collective bottom line but also your ability to jointly make financial commitments, like buying a first home.

When it comes to love, so many of us are looking for the ‘right one’. These ‘right ones’ often will share similar and compatible interests as well as values. But one crucial component many of us tend to forget is financial compatibility. Money is going to impact the many choices you and your partner decide to make, or not to make. Are we going to buy or rent our first house together? Are we having kids and how many? How do we retire early? Many of these things take up a considerable amount of financial planning and if you and your partner are not on the same page, it’s going to be tough. To be clear, finding a partner that is financially compatible does not mean finding a partner with the same financial standing as yourself, rather, it is more to do with the respective attitudes towards each other’s habits surrounding money.

Some couples opt to set up a joint bank account as soon as they decide they are in it for the long haul while others decide to keep their money separate for their entire lives. Since the two of you will be merged in marriage, most of the household expenditure will be shared, such as food, housing, transportation and entertainment. Drawing from a joint account would be beneficial in the long run.

However, while sharing a bank account can simplify your money management system, some couples may feel a loss of financial independence with a joint bank account, especially early in the marriage. With separate accounts, each spouse maintains an individual degree of freedom over their finances.

Having a joint account can also be problematic if the relationship ends because if the couple decides to part ways, the funds in a joint account can be messy to separate. In the end, regardless of the decision the both of you make, the two of you needs to be on the same page when it comes to budgeting, because it is highly likely that the vast majority of the things you spend money on will be shared.

Another important question to ask yourselves is what will happen if an expensive emergency like a lost job, family illness, natural disaster, or a major home repair happens.

Questions like, “If you need to pay for something extra or unexpected, are you willing to get a short-term part-time job or will you two be willing to sell a shared asset?” are important questions to cover as to avoid any misunderstanding or complications down the road. The conversation can be uncomfortable but it is better to be safe than sorry.

Of course, the best course of action would be to look into the various financial securities like life insurance or investment link plans that AIA provides. For example, A-Life Wealth Care is an investment linked plan that provides high coverage amount and provides your family with a financial safety net when you are no longer around. It also allows for withdrawal of money for life celebrations event like weddings.

Another product would be the A-Enrich Gold, which is a short pay savings plan that offers guaranteed cash payments and potential growth in funds invested. Combined with insurance coverage on death and total permanent disability and a guaranteed maturity value, this plan is designed to help maximize the return of your hard-earned money.

In the end, marriage is all about teamwork and the both of you must work together to come up with and find ways to accomplish those goals. Always encourage each other and build each other up. Be aware of your own weaknesses and strengths and play off the strengths of your spouse to bring out the best of what you two are trying to accomplish. Both marriage and money can be tricky, but the best thing you can do is be open and honest with each other.