Marrying for love... and NHT benefits

BY CANDIECE KNIGHT

Monday, August 19, 2019

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HERE comes the bride... but she has company — all the financial issues of marriage, too. While many people aspire to marriage, there are still some who shy away from getting hitched because of these various issues, and some who gravitate to it because of all that they can gain. Is getting married a good financial decision? Are you taking on a liability when you tie the knot?

Financial advisor Granville Knight shares some of the pros and cons of jumping the broom.

The cons

Initial setback

Unless you plan to get married with just the pastor and two witnesses, your wedding will cost money. We want our weddings to be memorable, not just for the bride and groom but for the guests, too, and this can be a hefty sum as the grander the celebration, the greater the cost.

“I've seen weddings costing between $500,000 and a million dollars. A wedding planner suggests having about $1.5 million if you want that once-in-a-lifetime experience. This money is a significant part of one's earnings, assuming that it's the minority of people that earn above $2 million per year. As such, a grand wedding can be a financial setback for the newlyweds. But who cares when you will give anything for love, right?”

Assumption of bad debt and credit history

In marriage two become one, and that includes all the debt and poor credit ratings of your partner. This will become important for home and car purchases. Banks will not lend you money if the purchase is a joint effort and either party has poor credit/debt history. Be sure to clear the bills before tying the knot, Knight advises.

Difference in spending habits

Many marriages end because of the differing views on money. A spendthrift wife or husband can make shared finances a nightmare. Both parties must be on the same wavelength as it relates to spending and making wise financial moves. It's important to have a serious conversation about finances before getting married, and for couples to make a budget and stick to it.

Divorce

So you've realised that it's not the right man for you, after all? Breaking that bond that “God joined together” comes at a cost. Between lawyer fees, mediation, and previous debt held by the marriage, you will find it cheaper to reason things out and live happily never after. Getting a prenuptial agreement at the beginning of the marriage is a good way to reduce the loss of assets to the big D, so it's a good financial consideration to make, even if you don't foresee a divorce.

But there is good news, Knight says. Assuming that both partners are financially stable, marriage can be more of a pro than a con.

The pros

Reduced expenses

When the financial responsibilities are shared it is much cheaper than living by yourself. Imagine all those monthly bills cut in half, when the usage isn't necessarily being doubled.

Health insurance benefits

One can always piggyback on the health insurance of their spouse. This is even better when both spouses have health insurance, as you can double up on the benefits for additional coverage.

Better loans through joint ownership

It is always easier to make investments and purchases such as real estate, car purchases and businesses when one is married.

Financial protection —“I got you”

In a world of selfishness, you can be sure that your partner will have your back should you fall on hard times. Also, should your spouse pass away, you are more likely to be a beneficiary on their life insurance. Based on his experience, girlfriends and boyfriends or 'babymothers' and 'babyfathers' are less likely to be beneficiaries, Knight said. As a widow or widower, your partner's life insurance can keep you in a similar situation as you were in marriage for several years, giving you time for the family to get back on its feet financially.

Statistically, you will be better off

Long term, being married is far cheaper than being single. People who are happily married live healthier, happier lives. The children of such unions also tend to be more successful and make an impact on society. While you may not always be happy, statistics have shown that married couples are happier than single people.

Ultimately, marriage can be a big bonus on your finances. The cons can be eliminated through careful planning and knowing the financial mindset and status of your partner. Do not ignore the red flags in the name of love. The pros are ever present facts and will forever hold true. Will you now marry your financially compatible partner?

Follow Granville Knight on Instagram @gkwiseinvestment or send him an email at Granvilleknight@sagicor.com.


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