Matrimonial bliss with financial conscience
As I compile this article, I am also preparing to be the proud uncle at an exclusive venue where my niece will be exchanging vows with her long-time lover.
This is common wedding season in SA filled with massive celebrations. There are several financial moves that all couples should make long before they commit.
Hashing out monetary matters may not make for romantic pillow talk, but a little financial planning can do a lot for your love life down the line.
But first let's remind ourselves of the various types of marriage regimes in SA. Knowledge of these regimes will assist those who intend to enter into a lifetime journey with their better (or best) halves.
First, we have a civil marriage, which is a traditional form of marriage where you cannot take another husband or wife. The couple would have to decide on which contract they prefer.
The options include in community of property, or out of community of property with accrual, or out of community of property without accrual.
We then have a customary marriage where a marriage is negotiated, celebrated or entered into in terms of customary law.
This is legally recognised in terms of the Recognition of Customary Marriages Act. This type of marriage allows for polygamy and provides a duty on the spouse to have the marriage registered. The other form of marriage regime is the civil union as per the Civil Union Act. This allows marriage between two people of the same gender.
So, what type of moves can you make to set the tone for a financially conscious and sustainable marriage? It all starts during the dating period.
It is prudent to include talks about money as your relations become serious.
A person's financial habits provide credible insights into their values and ethics. If either of you are handling money carelessly or irresponsibly, you have to question each other and be honest about your respective shortcomings. A good relationship is one in which each party helps the other become smarter about money.
There is also the dreaded documentation that is a necessary evil to safeguard your respective assets. For example, a prenuptial agreement will delineate what is solely yours before marriage, meaning you will be protected if you divorce.
For those contemplating a second marriage, this will be particularly useful. That document will spell out what portion of your personal assets will pass to your children, rather than to your new spouse.
There are common mistakes that some couples make along the way. Most couples fight, but financial arguments often have a lasting effect on a relationship. Sometimes arguments about money can lead to divorce or the end of a relationship. Listed below are some issues couples need to consider to avoid a sad situation:
- Merging the finances;
- Dealing with debt;
- Keeping the spending checks and balances;
- Investing or savings values, ethics and morals;
- Keeping separate accounts; and
- Emergency planning.
Some couples (women especially) take a back seat when it comes to finances. If you want to be successful in life, you have to be in the lion's den right there with your spouse, aware of all your money management (or mismanagement) habits.
Be part of the discussions and be comfortable to let your spouse guide you to financial success.
- Sekese is a certified professional financial planner and member of the Financial Planning Institute (www.fpi.co.za)