Marriage Milestones That Change Your Finances
There’s no other life event quite like marriage. Stepping into this “team effort” opens up your and your husband’s perspectives on establishing a family “nest”, having children and caring for two ageing parent pairs (no longer just one!).
Within the blink of an eye as short as a marriage ceremony, you’ve taken on a new status. You look out on a collection of exhilarating, significant future milestones. Most of these milestones will require re-thinking your financial strategy, and some will require that you dip very deep into your pocket.
These milestones will also impact the two of you emotionally, physically and financially. By discussing such impending milestones well in advance, you can plan for them together and put yourselves in a much better position to manage them effectively.
- Buying a new home
The value of property in Singapore has risen significantly over the past few years. Given the high prices, buying a home will for most people require taking out a mortgage.
According to Money Sense, buying a house involves an upfront payment, including your down-payment and legal fees, followed by monthly payments for the loan instalments, interest, property taxes and insurance. In addition, you’ll need to calculate for unexpected expenses like repairs and maintenance. It’s necessary to be financially prepared for these.
According to the SG Young Investment blog, the total cost of the downpayment for 4-bedroom flat may range from SGD 53,000 to SGD 65,000.
The voluminous expense associated with purchasing a home can increase the financial friction between you and your husband. That’s why it’s important to sit down together and discuss how much you can afford before you start house-hunting.
How much are you making right now? How much can you afford, given your salaries, available savings, existing expenses, outstanding debts and current lifestyle? Your very first home does not have to be your dream house.
Choose a property that you can afford over the long term. Our home loan calculator can help you estimate your monthly payment.
Related: Infographic: Buying Private Property In Singapore
- Having a baby
New parents can easily feel overwhelmed. After the little one arrives, you as parents, you will surely want to give your child the very best, no matter how high the price tag is. Figure out how this new additional spending will affect your finances and revise your household budget to include all baby and child expenses.
Before the baby arrives, look into the government incentives that you may be eligible for through the Marriage and Parenthood Package. As described by the National Population and Talent Division, this programme encourages parenthood through a broad range of measures ranging from housing priority to baby bonus schemes and childcare options:
Familiarise yourself with your company’s maternity leave policy. Have a look at the obligatory legal maternity leave framework at Just Landed, which describes a woman’s entitlement to four weeks before the baby’s due date and eight weeks immediately after.
Above and beyond this, you may be able to negotiate even better terms with your employer, depending on their own policy.
- Caring for ageing parents
Much like young children, your and your husband’s elderly parents will need physical and financial assistance as they start to grow too old to take care of themselves. When the time comes that your support is required, expect to reorganise your finances and your hectic schedules to help accommodate their needs.
Well before your parents need elderly care, talk about the issue with your partner. Talk about the other people who may need your help someday. These include not only your parents but also other family members like a childless aunt or the son of a deceased sibling. Have an honest discussion about what you are willing and able to do to help your loved ones.
- Leaving or losing a job
Imagine that one of you loses your source of income. The employed partner may feel pressure to pick up the financial slack, while the one without work may feel ashamed about their lack of financial contribution to the marriage. This situation can create unnecessary tension between you and your husband. To help you deal with the decrease in income, be sure to have an emergency fund ready.
When it is time for you and your partner to retire, you will face big adjustments in your finances. It is important that you create an investment strategy around your potential retirement plans as early as you can.
Do you plan on retiring when you reach the age of 60? Or do you plan on working well past any official retirement age? Do you think you can afford to retire early, say, at 55? Do you want to travel and see Europe during your retirement years? Or do you want to move to a rural area and enjoy the peaceful and pristine environment there?
To be well-prepared for the years when you and your partner cannot work any longer, take the time now to answer key questions about your retirement, and devise a comprehensive investment strategy together. At Money Sense, financial pros suggest retaining an income of at least 70 percent of your last annual income to maintain your current lifestyle during your retirement years.
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