Love, Dating, Marriage are financial events too…

When a couple is dating, expenses go up. It becomes more difficult to keep within a strict budget when you have to spend to buy gifts for a girlfriend and eat out in expensive restaurants. Needless to focus on how expensive weddings/marriages can often be.

But do you know that getting married also confers significant tax benefits on a couple? In the US for instance, the Internal Revenue Service allows couples filing taxes to claim a larger tax exemption. The Federal Inland Revenue Service also allows Nigerian taxpayers to claim a married partner as a dependent. This, in effect, reduces the tax burden on the taxpayer.

In this article, we shall go from dating to marriage to see if there are any financial planning best practices we can adopt. Let’s get to it, shall we?

First of all, dating:

When dating, I’d suggest you consider dating on a budget. This is necessary in order to minimise impulsive spending. Also, do you have a favorite restaurant or place you regularly go to? Do they have discount deals or membership? It might be a good idea to sign up and get points.

Talk about money very early in your relations. You don’t necessarily have to ask the “how much do you earn?” question. Instead, ask open-ended questions like, “do you think credit scores are helpful?” These are not questions to find fault but to establish shared beliefs that can be built on.

There will be a partner who is more knowledgeable about money. That partner should be the “Chief Financial Officer”of the relationship, educating and explaining money to the next person. Remember, you’re both in it together.

However, when you date, you need to understand how your partner deals with money. Is he or she a saver, a spender, or a  “dad will pay bills” kind of person? Doing this is as important as understanding partners’ view on religion or soccer. Does your partner shop impulsively to impress you or does he/she deliberate and decide with you before making a purchase?

Redline: Do not ever go into sizable debt just because you are dating someone.

Hint: No prenuptial talks at this early dating stage either.

Going Steady

Okay, so now you’re in love with her and she’s in love with you. But who is going to pay the bills? you both have to agree who will pay the bills in the meantime, later, and later on.  If one half is in school, who pays? Are bills shared? Who pays rent? Ask, to know. Never assume.

Remember, you are still dating but a bit more steady now. Therefore, set a budget for dates, put a maximum cap if possible.

[READ: Why your savings are not growing]

How are living arrangements? Separate homes? Living with parents? What’s the plan? New home? one party will move in? who? Which rent is cheaper? which location is nearer to work? These are important questions to address, even as traditions may have to give way to financial realities on ground.

To be clear, who earns and who pays the bills are two different questions, in most cases, the earner pays the bills but not in all situations. Again don’t assume, agree.

When will you have a joint account? Before marriage? After marriage? Having a joint account before marriage allows contributions to your joint “wedding account”. Donations in cash gifts can be spent from here. Agree on expenses, spend from here.

Draw up your list of financial goals, rank them together, agree if buying a home comes before buying new cars. Which bank will you both use? Which Pension Fund Administrator are you going to use? Will you both buy life insurance? What sum is assured? How much money saved away in an emergency fund.

[READ: How to know when your debts have gone overboard]

Will both of you work? Who will resign? Lots of questions, right? Well, the point is to agree as a couple. Again, never assume; ask.

Its also important for both of you to draw up your balance sheets and meet with a financial planner or adviser to optimise your assets. What is the debt picture like? Is another partner cash-rich? Can there be net off benefits? Specifically, try to enter the marriage debt-free as a couple. Keep records.

It’s time for a Wedding

Sit down and cost your wedding; have a budget. Don’t have a wedding based on how much you can save or raise via contributions. Agree your budget together now, spend that agreed sum with a % variance allowable. There is an African proverb about wedding guest which says “no matter how many cows are served at the wedding, not everyone will be satisfied”.

If Dangote gives you a substantial check (amen!), do not change the wedding venue to the moon. Instead, invest the gift.

For the wedding, if you have the means, spend, have a blast. Otherwise, remember the wedding is just a party, the marriage also has major expenses (like rent) coming. First thing, you pay for your wedding, your honeymoon so that if the wedding DJ blows a fuse, you escape to your honeymoon.

It’s difficult to advise about spending for a wedding. It’s understandably an emotional thing. However, look to saving money by paying early, buying in bulk, calling in favors from family and friends. For the guys, buy a black suit, so you can wear again, no purple and white suits (yes seriously).

Living as a Couple

Back from Honeymoon and thinking of keeping a joint account after the wedding? That’s a good idea as you can pay joint bills from here. You can extend the principle and have a Joint investment account too. Take important financial steps together, sit together and agree a budget for all expense heads, clothes, rent, holiday, and entertainment.

Be clear who is responsible for managing the finances, (i.e. who will make the actual bill payments). In terms of an action plan, its advisable to do it in this order:

1. Pay off all debts, have a budget and plan

2. Create an emergency fund, 3 to six months of Non-Discretionary Expenses

3. Get Life Insurance

4. Agree on an Investment Plan

5. Mortgage Plan, start a plan to own your own home

If you plan to have children, plan for them. When will you have them? where will you have them? Get the cots, add to your budget, start to plan for it today, so its less a burden in the future.

When you get married, list your significant partner as the beneficiary next of kin on all documents. This is important. If you have a joint account, ask if it has a “right of survivorship” clause.

Money is a significant cause of the marital breakdowns witnessed in our society today. Hiding expenses or significant assets from your partner breaks down trust. Therefore, in all that you do, be transparent. Be open, never assume, and do things together.