Financial lessons to be learned from the royal wedding

The marriage of Prince William and Kate Middleton is expected to be one of the biggest social occasions of the year with some reports saying it will cost more than $48 million. However, while few marriages start with so lavish a celebration, it is important that all couples take the time to get their finances in order before tying the knot.

According to Alon Perlov, Managing Director of Genesis Capital’s financial planning subsidiary - Genesis Advisory Services – soon-to-be-married couples should take the time to speak to a qualified financial adviser who can advise them on the necessary changes that should be made. “One of the key changes for many engaged couples is that their financial planning would now have to include the protection of joint assets in the advent of the death of a partner, or some form of financial support in the event of a disability or severe illness of either party.”

He says life cover becomes increasingly important for people who are married as the loss of half a household’s income, in addition to coping with the bereavement of the loss of a partner, could leave someone in a potentially financially ruinous position.

“When determining how much life cover to take out, it is a good idea for people to determine what their outstanding liabilities would be, such as bond repayments, car loans and credit cards, as well as ensuring that they have provided enough income for the surviving party to maintain their current standard of living.”

Perlov also says if the couple has children then it is essential to make provision for their educational costs, from primary school through to university, as these can prove substantial, especially for one parent.

However, he says one of the biggest financial obstacles facing many newly-married couples is the fact that they tend to take on new debt too quickly. “There has been a real mind shift in the last ten years with many consumers, especially the young, viewing debt as a norm. This can be especially true when a couple is planning an expensive wedding, as they simply plan to pay back the money afterwards.

“However, when a couple gets married this is just the time that they should be considering putting money away and saving for their joint needs, such as a deposit for a house or even planning for children.”

Another common mistake is failing to update their will to take into account their new circumstances. “This is especially important when children are involved. By law, children under the age of 18 are not allowed to inherit money in their own capacity. However, a beneficiary nomination in a life policy always super-cedes the will, so it is vital to ensure that no minors are appointed as beneficiaries.

Perlov says people should speak to their adviser to review their finances on a regular basis, but especially after any major life changes such as marriage, children or an important promotion, to ensure that their financial plans always remain appropriate to their own and their family’s needs.