Alright, all is set. You’ve made all necessary financial preparations-including a well crafted financial plan- and everything seems to be in place for the journey into a blissful marriage. But have you also considered the need for a financial backup plan?
After taking the time to make the usual financial preparations such as drawing out a financial plan and harmonizing preferences, needs and goals, engaged couples often neglect making room for uncertainties. As a result, they become dumbfounded when an unexpected financial need is thrown at them. Worse still, most couples already get into huge debt while still preparing for the wedding ceremony.
Here are 5 financial backup plans you need to consider while preparing for your marriage:
1. Have Some Investment in Highly Liquid Assets
It is important you make substantial investments in assets that can easily be converted to cash such as stocks. This will ensure a constant cash flow needed to meet urgent expenses not accounted for in your financial plans. It will be unwise to have a substantial part of your investment tied in illiquid assets such as real estate and government bonds while preparing for marriage. This is because the financial pressures of starting a new family might warrant you to call on money tied in your investment portfolio to meet urgent needs. However, after settling down, you can then go ahead to make an investment in whatever asset class you desire and begin to build your investment portfolio.
2. Add To Your Income Stream
The importance of having a multiple stream of income cannot be overemphasized. However, it will be particular helpful for you to generate multiple streams of income before venturing into marriage. Add to your income stream. Look for services you can render alongside your regular paying job such as freelance online jobs and network marketing. Income from these part-time jobs will provide a cushioning effect when dealing with unexpected expenses.
3. Have Some Money Placed In A Contingency Saving Fund Account
Aside having multiple income streams, it is wise to also operate a contingency account you make withdrawals from only when urgent needs arise. Although this might be difficult to operate especially if your income is low, it is still important you endeavor to maintain one. This will prevent you from having to borrow to meet your basic needs at the early days of your marriage when your primary savings have been exhausted.
4. Get Out Of Any Outstanding Debt
Carrying over accumulated debt into marriage will cause serious financial challenges for you early in your marriage. It is therefore wise to offset any outstanding debt before venturing into marriage. Most couples today get into debt after spending on the wedding ceremony; thus, adding any outstanding debt to this will only place them in a precarious situation, financially.
5. Walk With The Wise And Hold Unto Sound Financial Principles
For engaged couples, marriage is an uncharted territory. It is therefore important to be in the company of those who have treaded this path before. They could be your parents, mentor, financial advisor or friends. Maintain a close relationship with them and ensure you seek their advice at every phase of your preparation for marriage. Having veterans as tutors will prevent you from making costly financial mistakes that could negatively affect your marriage.
Aside this, it is also important you hold onto sound financial principles that have endured the test of time. Even when your financial backup plans fail, having a company of veterans to run to for assistance and sound financial principles to hold onto, you will be able to handle every curve the married life throws at you.