Five things to do before you get married
Follow these five steps before you get married to avoid financial disaster.
If your beloved got down on bended knee and popped the question last Saturday, you're not alone. Thousands of people get engaged on Valentine's Day every year - but strangely, few appear to discuss the huge impact their impending nuptials will have on their finances.
No doubt, a prolonged exchange about your bank balance - never mind your new insurance and protection needs - seems a little, well, unromantic.
But let us not to the marriage of true minds admit there are such impediments. Before the dust settles on those dozen red roses and heart-holding teddy bears, it's time to get into bed with your fiance's finances.
Because if you're not prepared, what starts off as the happiest journey of your life could easily turn into a massive financial disaster. Take these five steps now to avoid the worst later!
1. When life means life
You're about to swear to love, honour, cherish and protect your beloved for the rest of your life. But what if the rest of your life doesn't quite pan out the way you planned?
It doesn't involve loving declarations or public oaths, but ensuring the person you love is adequately provided for, whatever happens to you, is one of the most romantic acts you can commit, in my opinion. And that means insurance.
Life insurance is the obvious candidate - but it's also worth considering critical illness cover and income protection. Read A Fool's Guide To Life Insurance and Why It's Vital To Protect Your Income for more on these different types of cover.
2. Pension partners
So, you've been carefully squirrelling away the pennies into a pension pot. But have you ever considered what would happen to that money if you died before reaching retirement?
OK, it's a morbid thought - but one thing's for sure: it will be too late to deal with it once you're dead. So deal with it today: write to your pension provider and ask for your death benefits to be signed over to your fiance. The same goes for any death-in-service benefit you get from your employer.
For similar reasons, you may also wish to make a will - although the good news is, once you're married, your spouse will automatically gain limited inheritance rights over your estate. Read this article for more info.
3. The ring on your finger...
It may already be worth more to you than words can wield the matter, dearer than eyesight, space or liberty. But if you don't insure your rings, you're effectively valuing them at...diddly squat.
So ask your home insurance policy provider whether your rings would be covered for accident, loss and theft within the home. You may find you have to declare each ring separately on your policy, if it's worth over £1,500. This could push up your premiums with some insurers, so shop around the next time you come to renew to ensure you're getting the best deal.
Unless you are planning only to wear your rings inside the home - which would be a little odd - you'll need further insurance to protect the rings outside the home. The good news is, personal possessions cover typically includes wedding and engagement rings, so if you already have this insurance as part of your home insurance policy, you shouldn't need to take out any extra cover. Double-check to make sure.
Top tip: Personal possessions cover should prove far better value than any insurance offered by a ring retailer, because you will not only be protecting your rings, but all the other possessions you regularly carry with you, such as your mobile phone and the cash in your purse or wallet.
4. 'Til debt do us part
How are you going to pay for this? Whether you've got the cash in hand or not, the best way to pay for anything that costs more than £100 is by credit card. This ensures you have the protection of Section 75 of the Consumer Credit Act.
?Under this Act, if the goods or services you buy are misdescribed or fail to live up to expectations -- or if the seller goes bankrupt before you receive what you bought -- then you'll have the right to full compensation from your credit card issuer.
And once you're paying by credit card, it makes sense to be savvy about which type you use. For example, you could use a cashback card that will reward you for each £1 you spend. But this is only a good option if you can afford to pay off the bill in full each month, or the interest you pay on your debt will far outweigh the benefits of the cashback.
So if you're unable to pay for everything upfront, use a card that charges 0% interest on purchases instead. That way, your debt won't spiral out of control - one of the biggest causes of divorce.
5. Gifts, gifts, gifts!
When you're spending thousands of pounds, it's only fair that you should expect some expensive gifts in return, right?
Again, this will increase your need for cover. Luckily, you may not have to pay for this. Some home contents insurance providers, such as Norwich Union Direct and Asda, automatically increase your cover by 10% for a month before and after a wedding. Other insurers, such as Halifax, offer unlimited cover as standard. Check your policy to be on the safe side.
So that's it - the five steps to marital bliss. Well, from a financial perspective, anyway!