Maybank Singapore's head of branch banking, Mr Fong Wai Sun, said couples should openly discuss the potential considerations and constraints if they are dealing with joint assets, joint bank accounts and joint taxes for the first time.
The discussion should include whether they will continue to live with their parents after marriage or invest in their own home.
Another potentially sensitive topic is whether either party or both will continue to have obligations to their respective families.
'It is important to start on the right financial footing together,' Mr Fong said.
Attempting to do just that is market researcher John Cheong, 27, and secondary school teacher Michelle Lee, 23, who are planning to get hitched late next year.
In between their busy job schedules and checking out a suitable venue for their wedding banquet, they set up a joint bank account a fortnight ago.
'We plan to sit down to decide what proportion of our income should go into the joint account and for what purposes it will be used in the long term,' said Ms Lee.
'In the short term, we will use the account to take care of our wedding expenses. But apart from that, we are hazy about what other financial issues need to be looked into.'
When working out financial issues, OCBC Bank's vice-president of group wealth management, Ms Anne Tay, said that it all boils down to what is comfortable for the couple.
Most importantly, there must be agreement and commitment towards the plans that they make as a couple.
Here is a financial checklist for couples.
Establishing financial goals
Discuss your goals for the future: whether you want to have children and when; the kind of lifestyle you hope to have; and even when you plan to retire, said Mr Brian Goh, senior vice-president with ipac financial planning Singapore.
Savings and spending strategy
This should complement your lifestyle goals. It is especially important to discuss this and deal with any differences in your respective incomes, Mr Goh said.
Think about which expenses you want to keep separate and which you want to share. This will help you draw up your household budget and decide on bill-paying responsibilities.
Knowing your combined financial worth
Calculate your combined wealth as a couple so you know your new household's financial worth. Review any combined debts - for example, mortgages - and calculate how long it may take to repay them, Mr Goh said.
It helps to have an understanding of each other's financial capacity, which includes the earning capacity as well as all the assets and debts that both may bring into the newly created family, added Alpha Financial Advisers' chief executive Arthur Lim.
From this, a family cash flow and balance sheet can be developed which will give both of you a full understanding of what you can and cannot afford and what each needs to sacrifice financially in order to achieve whatever you both want.
Setting up a fund for emergencies
One of the first things a couple should do is to establish a fund for rainy days. This should amount to six to 12 months of mortgage payments and household running expenses, which can help maintain the family lifestyle while a more permanent solution is found, in case of illness or loss of job.
In today's economic context, this becomes even more important, said Mr Lim.
Handling of monthly household expenses
When one partner is more extravagant and the other is more of a saver, the couple must decide how to find a compromise to avoid friction in the marriage.
Ms Tay believed that the saver may be the better party to handle budgeting in the household, or be given the job of managing the monthly household expenses.
Maintaining separate banking accounts
Being married does not mean that everything needs to be combined, Ms Tay and Mr Lim pointed out.
Instead, a couple can consider setting up a joint account for household expenses and any shared expenses, and keep individual savings and investment accounts separate. This way, should anything happen to your other half, you will not be left in dire straits. Instead, you will still have access to your money or emergency funds to tide you over the 'difficult' period.
Having your own individual accounts also helps to preserve the freedom and personal space that we all require, said Mr Lim.
Deciding on contribution to the joint account
One suggestion is to go by a certain percentage of your individual monthly income.
This will allow each individual to feel that he or she is contributing 'equally' to the joint account, especially if the couple have different earning abilities. Or you may decide, jointly, that the one who earns a higher income will contribute a larger percentage.
Handling increases in earning power
As you progress along in life, one party may start earning more. It is critical that both of you discuss how you should handle such changes without jeopardising your marriage or allowing it to become a point of contention in the future.
While it may seem a little early to talk about the details, at least both of you would have formed some kind of common understanding or broad agreement.
Planning to buy a house
You may want to do this jointly because it is a big-ticket item that requires a huge commitment from either partner, Ms Tay said.
For example, both of you may want to jointly set a goal of owning your home in two years' time.
To achieve this goal, you may wish to ask yourself some of these questions: How much of your pay should you be saving towards the down payment for the house? Where will the savings be held and who will be tasked to grow the savings? How is the mortgage going to be financed - that is, via Central Provident Fund (CPF) savings and cash, and in what proportion?
Handling the investment of the joint savings
The person who is more financially savvy should undertake this role, said Ms Tay.
'Do note that the person who is good in handling household expenses may not necessarily be good at managing investments. This is because he or she may be a low-risk taker and will tend to take the conservative route and put everything into a fixed deposit account, thus not making your money work harder.'
Reviewing your existing insurance policies
Look at your policies and ask if they are still providing you with the adequate protection after marriage.
For example, you may have bought a house which requires financing. In this case, you should consider picking up a mortgage-reducing term assurance plan which protects the surviving spouse by paying up a portion or all of the remaining housing loan, in the event of a partner's untimely death.
Also, check if you are short of, or if there is overlapping insurance coverage between you and your partner. Add your spouse as your insurance beneficiary.
Updating your CPF nomination
You need to re-nominate beneficiaries for your CPF funds as your previous CPF nomination will be revoked upon marriage.
If you do not submit a new nomination, your CPF savings will be distributed according to the Intestate Succession Act, which decides who receives your assets should you die, Ms Tay pointed out.
If you do not have any children but one or both of your parents are alive, then your spouse gets half of your assets, while the remainder goes to your parent(s). If you have children, your spouse gets half of your assets, and your children will share the remainder equally.
This article was first published in The Straits Times on November 02, 2008.
