Marry in haste and repent at leisure is a popular saying. One fact that takes a toll on modern marriages that are increasingly ending in divorce is financial incompatibility. Here is a look at the stress points that may develop in relationships
That marriages are made in heaven is now passé in India too. Today more marriages result from romances that bloom at the workplace and on social networks. Often, the boy meets girl; they fall in love at first sight and move into a live-in relationship—no questions asked or explanations sought. In the traditional situation it was left to the elders of the families to carry out discrete inquiries into the social standing, financial status, character, et al, besides the customary matching of horoscopes before moving a formal proposal. All castes and communities generally followed this modus operandi, with slight local variations, across the country.
In the changed milieu, boys and girls of today do not hesitate to present their parents with a fait accompli—“Dad and Mom meet … with whom I’ve fallen in love and plan to marry.” This proposition generally is reluctantly accepted by the elders—sometimes with a bit of sane advice to spend more time in getting to know one another better before plunging into matrimony and to remind impetuous youngsters that marriage is a long-term relationship not only between the two of but it binds their extended families as well.
In these days of Double Income couples, it is imperative to pay attention to Financial Compatibility well before marriage, instead of repenting later. Financial incompatibility often becomes a festering sore; it magnifies even the smallest difference of opinion into a time bomb that ultimately explodes and results in a break-up.
Ascertaining each others’ financial compatibility is not at all difficult. All it calls for is some clear-headed observation, gently probing and discreet inquiry about the lifestyle and spending habits of one another. It is easy to notice whether someone follows the basic financial discipline of living within one’s means or splurges on fine dining, partying, clubbing, designer clothes and accessories such as watches, glasses, high-end gizmos such as mobile phones, laptops, jewellery, luxury holidays. Unchecked spending is invariably a red flag that lead to debt traps—especially if the spending is through credit cards.
On the other hand, there can be extreme miserliness in the name of frugality. Cribbing about spending on essentials or forever claiming to have forgotten one’s wallet or being short on cash—this is another extreme and just as bad. There is no need to hire the services of a private eye to notice these traits. If you are both high-spenders, you can go into a debt trap together; if you are both miserly, you may manage actually work out quite well.
The take-home pay or monthly income
For starters, think seriously about your own salary and that of your would-be partner. Don’t get carried away by fat “compensation packages” calculated on the basis of “cost to the company’’, which can be extremely deceptive. Your spending money is the net take-home after all deductions that is credited to your bank account.
If in business or profession, to ascertain its nature and source of income are also important—it could as well be a shady, fly-by-night business. The market standing of the business needs to be ascertained by independent enquiries.
Unlike their parents for whom the very terms borrowing and incurring debts are anathema, the new generation has the advantage of easy access to personal loans that provide a jump-start to creating assets or acquiring necessities.
Today, it is easy to obtain hefty home loans invariably mortgaged on pooled income of the couple soon after marriage. Often you can get personal loans to pay for expensive interiors and the latest gadgets also funded through EMIs. It results in starting ones married life heavily in debt. Pre-existing liabilities such as an outstanding education loan, outstanding or guarantees provided for others, can be stumbling blocks that need to be factored into enquiries.
Another propensity for debts will be evident from the presence of multiple credit cards in anyone’s wallet—a clear indication of an individual’s credit dependence. Plastic money is indeed a very convenient mode for acquiring practically anything and everything without having to shell out money upfront, forgetting that there is no such thing as free credit. Problems arise when the payments fall due; unpaid bills carry penal interests that can go as high as 40% pa or more.
Ideally, not more than a fifth of one’s income should go for debt servicing EMIs for the simple reason there has to be enough left for other domestic needs, medical emergencies, savings and investments.
Couples who borrow together—especially their hefty home loans—must remember that one financially reckless partner can ruin the credit history and credit score of the other. This has serious, long-term consequences that outlast a bad marriage by almost a decade. A default on your credit history puts an end to future borrowings in India today.
Contributing to the family kitty
Unlike those living in the West, in India it is still customary to live in a close-knit joint family comprising parents and siblings. Everyone who starts earning is expected to contribute to the family expenditure, including medical and educational spends. Some sons even continue send monthly remittances to their parents as tokens of their love and affection. It is also not unusual for the earning unmarried daughters to chip in too till they move out or to help put together a nestegg for their own wedding expenses.
It is important that both partners are clear, upfront and in agreement about continuing monetary contributions to their respective families, otherwise they become sore points later. Both partners also need to discuss and communicate with their families whether or not they wish to continue living in a joint family. While breaking away from a joint family was considered a major betrayal just a few decades ago, the easy availability of home loans has now made it a norm. In fact, the joint family now exits either out of economic necessity or among the super-rich, with sprawling homes.
Being forewarned of the potential pitfalls this is just what young couples ought to go about by first ascertaining the financial compatibility of their would-be partners.
A check list of suggestions
Most of all that is said here is based on hard core real life experiences and certainly not fiction—a red flag on the road to matrimony!
(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)
Alot of people who know something about stock markets are...
The Nifty has to keep itself above 5,815 to sustain the upmove
The market settled higher with the gains accruing in the second half of trade on buying in auto, capital goods and technology and consumer durables stocks. However, the Nifty has to keep itself above 5,815 to sustain the upmove. The National Stock Exchange (NSE) reported a lower volume of 48.97 crore shares and advance-decline ratio of 738:631.
The local market opened higher on support from its Asian peers, which were in the green in morning trade ahead of the two-day US FOMC meeting that gets underway on Tuesday. The outcome of the Fed meeting is expected to provide some indications on when the central bank will begin tapering its bond-buying programme.
The Nifty opened 12 points up at 5,820 and the Sensex resumed trade at 19,250, a gain of 72 points over its previous close. Nervousness ahead of the Reserve Bank of India’s (RBI) decision on interest rates in the mid-quarter policy meeting saw the benchmarks hovering on both sides of their previous closing levels in morning trade.
The market witnessed a sharp fall in late morning trade as the central bank decided to keep policy rates unchanged. The fall led the indices to their intraday lows wherein the Nifty touched 5,770 and the Sensex went back to 19,085.
However, the benchmarks soon recovered from the lows on buying support from blue chips from capital goods, consumer durables, healthcare and auto sectors. The market extended its gains in the noon session as the key European indices opened in the positive.
Meanwhile, India’s exports contracted by 1.1% year-on-year in May to $24.5 billion. Imports grew by 6.99% to $44.65 billion during the period, leaving a high trade deficit of $20.1 billion. Gold and silver imports, during the month under review, grew by 89% to $8.39 billion.
The benchmarks hit their highs towards the close of the trading session. The Nifty rose to 5,855 and the Sensex climbed to 19,344. The market closed near the highs of the day and in the positive for the second day in a row.
The Nifty settled 42 points (0.72%) higher at 5,850 and the Sensex gained 148 points (0.77%) to close the session at 19,326.
Among the broader indices, the BSE Mid-cap index gained 0.33% and the BSE Small-cap index advanced 0.39%.
With the exception of the BSE Metal (down 0.13%), all other sectoral indices ended in the green. The top gainers were BSE Auto (up 1.90%); BSE Capital Goods (up 1.15%); BSE TECk (up 1.09%); BSE Consumer Durables (up 1.02%) and BSE IT (up 0.76%).
Out of the 30 stocks on the Sensex, 23 settled higher. The top gainers were Mahindra & Mahindra (up 4.43%); BHEL (up 3.37%); Bharti Airtel (up 2.53%); Bajaj Auto (up 2.50%) and Sun Pharmaceutical Industries (up 2.20%). The main losers were Hindalco Industries (down 1.64%); Dr Reddy’s Laboratories (down 1.38%); GAIL India (down 0.98%); Sterlite Industries (down 0.90%) and NTPC (down 0.86%).
The top two A Group gainers on the BSE were—Aurobindo Pharma (up 6.49%) and United Phosphorus (up 5.38%).
The top two A Group losers on the BSE were—Adani Power (down 7.53%) and MMTC (down 4.99%).
The top two B Group gainers on the BSE were—Modern Dairies (up 20%) and Panacea Biotech (up 19.99%).
The top two B Group losers on the BSE were—Austin Engineering (down 19.51%) and JRG Securities (down 18.75%).
Of the 50 stocks on the Nifty, 36 ended in the in the green. The main gainers were BHEL (up 4.035); M&M (up 3.97%); Bharti Airtel (up 2.26%); Bajaj Auto (up 2.12%) and Reliance Infrastructure (up 1.75%). The key losers were Ranbaxy Laboratories (down 3.57%); Hindalco Ind (down .50%); GAIL India (down 1.35%); NTPC (down 1.32%) and Sesa Goa (down .27%).
Markets in Asia settled mostly higher ahead of the outcome of the two-day US Fed meeting and the weakening of the yen, which boosted the outlook for exporters.
The Hang Seng climbed 1.22%; the Jakarta Composite rose 0.29%; the KLSE Composite gained 0.57%; the Nikkei 225 surged 2.735; the Straits Times advanced 0.77% and the Taiwan Weighted closed 0.69% higher. On the other hand, the Shanghai Composite fell 0.27% and the Seoul Composite declined 0.32%.
At the time of writing, the key European indices were trading with gains between 0.89% and 1.79% and the US stock futures in the positive, indicating a higher opening for US stocks later in the day.
Back home, foreign institutional investors were net sellers of equities amounting to Rs305.68 crore on Friday whereas domestic institutional investors were net buyers of shares totalling Rs910.62 crore.
Era Infra Engineering today said that it has bagged a contract from Delhi Metro Rail Corporation worth about Rs 384 crore. The project, in a joint venture with Chengdu Ranken, is for construction of five elevated stations including architectural finishing and plumbing works of stations on Alwaye-Petta Line of Kochi Metro Rail Project at Kochi, Kerala by Delhi Metro Rail Corporation. Era Infra declined 2.44% to close at Rs141.65 on the NSE.
Venus Remedies, a research-based global pharmaceutical company, has received patent from Mexico for its novel antibiotic product Potentox. Potentox is an antibiotic adjuvant entity (AAE), a drug effective to treat cases of hospital-acquired pneumonia and febrile neutropenia infections, primarily caused by quinolones or aminoglycoside-resistant microbes. The stock gained 1.11% to close at Rs274 on the NSE.
Pipavav Defence and Offshore Engineering Company (Pipavav Defence) has bagged a contract to build two specialised offshore vessels for a European client. The contract is valued at Rs1,160 crore, and is to be delivered over the next 12 to 16 months. The stock gained 1.16% to Rs69.65 on the NSE.