How married couples can plan their finances
Discussions about money are often tricky in a relationship. From feeling like your combined income is insufficient, to having to plan for the kids’ education, working out your family finances can seem harder than running a 5K in high heels. However, with shared financial commitments, figuring out the family’s financial goals is important to keep expectations aligned. So how can you both work together on your money management?
1. Plan for the long haul
While most of us have our own life goals brewing in our heads, these goals might need to be updated when you’re in a committed relationship. Your partner suddenly becomes a key part in considerations such as investments, retirement planning, having children, property purchases – all of which require careful and deliberate planning to attain. And because the two of you are unique individuals, a consensus of these shared goals aren’t reached overnight.
A year off-work for an epic road trip? Retirement by your 40s? These are entirely valid goals as long as both of you agree on its importance. Once you have a common vision, work out a plan to reach it. Discuss targets for various milestones, such as purchasing a new property. If needed, sit down with financial planners to determine the steps towards those goals. Working together towards a shared target will help you stay the course towards it.
2. Purchase for both
Making purchase decisions as a couple can be a different experience from when you were single. With bills to pay and shared goals to aim towards, larger ticket purchases do become more of a well-considered process, instead of the instinctive act of whipping out your credit or debit card. Understand that your priorities might not be shared with your partner. If the item is a necessary purchase but would cause a noticeable dent on your finances, rethink a savings plan that you both can afford, and focus on setting aside money for it.
3. Prioritise what’s important
A shared life brings together shared financial responsibilities. Things like rent, groceries, utility bills, medical fees, enrichment classes, you name it—are shared expenses, so determine how they will be handled monthly. Some couples decide to split the bills equally, while others decide that one partner (usually the one earning more) would handle a greater share of the expenses. Whichever method you’re comfortable with, remember that frequent communication is key to ensure that these shared expenses don’t cause unnecessary friction between the both of you. If these monthly expenses are higher than budgeted, take a step back and decide what can be cut.
4. Build a solid foundation
Planning for a dream future is important, but life has a knack of throwing curveballs when you least expect it. While it’s not something we want to think about, some time should be spent planning what would happen to the family should you or your partner not be around any longer. Yes, the absence of a spouse is heartbreaking and extremely stressful, but legacy planning at least allows you some surety that you’ve done as much as possible to reduce the financial burden of any unforeseen mishaps or accidents upon your family.
Steps that you can take to ensure that your family is provided for include updating or increasing your protection coverage, and doing up a proper will in order to facilitate efficient transfer of your estate. If you have children or are planning to have children, then look into setting up an education fund for them. Long-term planning will allow you to be secure in the knowledge that your family would be protected in case of any unfortunate incidents.
Need help on navigating towards your financial future with your partner? Book an appointment for a private one-on-one session with our Wealth Planning Manager to have your financial queries addressed.