Do you know that one in every three rural households and one in every five urban households is under debt, and the most common purpose of loans in India isn't for starting a business or growing their assets but for "other household purposes"?
The major chunk of "loans for other household purposes" are to fund weddings.
Weddings, in Indian households, are a momentous affair, not just for the bride and the groom but also for the extended family that gets involved. An average Indian spends up to 6-10 lakhs in marriages and about 60% of Indians have less than Rs.5000 in their savings accounts.
The wide discrepancy shows that most of the weddings in India are financed by loans or the assets possessed by an individual. Talking of assets, India’s debt-to-asset ratio is outrageously low as compared to the global standards, with rural India having 8.5% more liabilities than assets and urban India having 14.8% more liabilities than assets.
If you’re someone who is getting married, first off, congratulations on taking the big leap, and secondly, don’t forget to have an honest conversation with your partner regarding debt.
Transparency is a vital ingredient for every relationship, and transparency in financial matters is even more important because marriages generate emotional as well as financial dependency for the couple.
Generally, there’s a visit from an astrologer before marriage to align the star-positions of the couple to fix the date. However, to lead a happy married life, aligning your financial positions are more important.
So, the first step to a stable married life is to analyze your financial position by gathering your financial statements, credit reports, mortgages, loans, assets, etc. If needed, you can consult a professional financial planner to ease your burden.
Add up all your assets - bank account balance, mutual funds, investment in equities and bonds, etc. - and subtract your liabilities - credit card balance, home loans, mortgage loans, etc. - to find out your net financial status.
Acknowledge each other’s short-term and long-term financial goals. How much do you wish to amass in your savings account in the next five years? How do you plan on clearing your current debts? What are your short-run and long-run investment plans?
Having answers to these questions is essential for you to have a common vision regarding finances in the long-run.
One out of every two corporate employees suffers from stress, and high debt is one of the major triggers for mental illness in our country. Assess your joint debt status, get acquainted with the ways in which you can clear your debt.
Resolving debt could be less taxing if intelligently done.
If you have multiple non-mortgage debts, you can practice the debt snowball method to pay off all your debts in a systematic way by paying the smallest debt first and moving your way up to clear the largest debt in your kitty.
Consult intelligent finance tools like mymoneykarma to know how you can save more on your loans.
If debt repayment is one of your major concerns, then you can ease your stress by minimizing your wedding expenses.
Follow the classic and trustworthy methods of saving to settle your debts
Filing for income tax refund can get you those extra bucks which could be diverted towards repayment of outstanding debts.
Communicate Your Differences
Expressing dissent on financial decisions and communicating your financial aims could help close the gap between any couple in the long-run. It's important to stay calm in situations of distress and disclose your ideas on how to deal with it. A joint savings account for your emergency needs could be a good start to your married life!
Marriages are a huge strain on the finances of the couple as well as their families. A wedding that digs a hole in your pocket would affect your financial and emotional well-being in the long run. Planning a wedding in India requires a huge deal of money. If the loan you’ve taken to finance the wedding is large, you’ll be burdened by unnecessary stress for a long period of time.
Weddings are a joyous affair that needs to be celebrated with friends and family, and a wedding loan that puts a dent in your wallet could affect your financial planning. Also, it’s essential to talk with your partner about any form of debt that you’ve accrued they can help you in resolving the debt and can provide you with the emotional support that you’ve always needed! Need professional support? mymoneykarma is always here for you.
We wish you all the very best.