Financial impact of marriage and divorce
Marry with your heart and your head. You are in love and completely infatuated, but you still need to think about this without emotion.
Getting married is not something to be taken lightly and definitely has big financial implications, says financial services group MMI Holdings deputy CEO Jeanette Marais.
People think that marriage is forever, but unfortunately for one out of every two people, it’s not the case. Plan for the worst, and this doesn’t only mean for divorce; what if one of your businesses fails or one of you incurs major debt?
If you don’t think with your head about the finances in your marriage, the implications can be far-reaching.
For example, says Marais, if you don’t sign a prenuptial contract before the wedding, you’re automatically married in community of property. This means that if one partner’s business goes belly-up, you’re just as responsible for the debt as they are.
Don’t let emotions derail your planning. Money matters are just one of the blocks that you must tick. See a lawyer for your prenuptial contract. There are various options when it comes to marriage contracts – choose what is right for both of you.
“Learn to talk about money,” Marais says because the road to the pulpit may be short, but the journey with your partner isn’t. “Make sure that you start off on the right foot by being honest about money matters, even before the marriage.”
If you can’t talk and agree about the difficult things before the marriage, how will it work after you get married? Both of you must play an active role in money matters. You’re investing in your future when you talk about it and make decisions together.
“When you talk about your finances it doesn’t mean you don’t trust each other, but rather that you’re a team that talks about everything and can trust each other.”
Plan so that you can afford your wedding. Beware of social pressure that leads to spending too much money on the perfect ring or perfect wedding day. The expectations for weddings can be massive, but think carefully before you try to make your dream wedding come true and you find yourself in a debt nightmare. After the honeymoon there’ll be other expenses, like setting up a house and raising kids. Don’t put yourself at a disadvantage.
Your marital status influences your money matters. Did you know that married couples pay less for short-term insurance? It’s also cheaper to be on one medical aid and married couples generally also get tax benefits. Understand the full impact on your finances, and adjust your combined financial plans accordingly.
Only one thing is more expensive than getting married – getting divorced.
“You don’t want to think about it, but if you should decide to get divorced, it’s very important to be realistic about how expensive it is. It starts with lawyer’s fees, and then it’s goes on to the costs of two households, moving, and both having to start another home from scratch.
“Whatever your scenario, be realistic, determine how much it’ll cost you to get a divorce and adjust your financial plan accordingly.”
1. Get married with your heart and your head.
2. Learn to talk about money.
3. Plan so that you can afford your wedding.
4. Your marital status influences your money matters.
5. Getting divorced isn’t cheap – plan realistically.