Couples Need to Exercise Financial Discipline

MARRIAGE affords spouses the potential of combining their income and sharing in responsibilities of the household. This means that married couples may be more likely to qualify for a home loan and enter the Namibian property market, purchase a car or two, or save for a holiday with the children.

The array of credit options available today, however, requires that married couples carefully focus on their financial needs and then plan accordingly.

“With the level of household debt at high levels, as recently pointed out by the Bank of Namibia, both spouses need to exercise financial discipline and make major financial decisions together as a team, as their individual spending habits can affect their joint estate. Loans and debts caused by one spouse can affect the couple’s joint estate, but this depends on the type of marital regime they are married under. If they are married ‘in community of property’, the joint estate is held liable for any debts incurred by any spouse, but if they are married ‘out of community of property’, the spouse responsible for incurring the debt is the one held liable”, says Anton Smit, Executive Officer Credit at Bank Windhoek.

“In practice though, regardless of which marital regime applies, financially savvy spouses would take care not to become heavily indebted, and assist each other to manage their finances prudently,” Smit adds.

Financial over indebtedness may cause unnecessary strain on a marriage and, in certain cases, may even lead to divorce. A divorce could further add to the financial woes with assets being divided (equally or not), legal fees, and maintenance costs of children to name but a few.

Financially savvy spouses therefore communicate and express their concerns about wasteful expenditure, cut back on unnecessary spending, and prioritise the careful management of their financial obligations together. Drawing up a household budget is key and contributions from all members of the family, including children, will go a long way in becoming financially independent.

“Each household budget will differ from family to family, and will depend on the lifestyle of each family. The budget must work for you and your family and include all expenses from groceries, water and electricity bills, to clothing, eating out at restaurants, and vehicle maintenance. Provision should also be made for unexpected expenses and increases in interest rates on house mortgage, vehicle payments, food prices and fuel price increases,” says Smit.

Source : The Namibian