When two individuals decide to enter into a committed relationship, they typically plan for a shared future, which includes financial planning. The way couples handle their finances can make or break their relationship. However, financial planning for couples comes with challenges that individuals may not have faced before. It’s essential to create a financial plan that aligns with your joint goals and values, being mindful of each other’s differences.
Here are essential steps to follow when planning finances as a couple:
Discuss your financial histories and behaviors
Before getting into granular details, sit down and have a candid discussion about each other’s financial pasts and present behaviors. This will enable you to gain a better understanding of each other’s attitudes towards spending, saving, and investing.
Establish shared financial goals
Once you’ve discovered your partner’s financial history and behaviors, create shared financial goals. Goals such as buying a house, getting married, starting a family, or retiring together. Understanding each other’s goals can help build a strong foundation for a future together.
Create a budget together
A budget is an essential tool to monitor your financial journey together. Create a budget that not only takes into account joint bills and expenses but also individual needs such as personal spending and plans.
Designate roles and responsibilities
Couples should divide their financial responsibilities and be accountable for their actions. This includes determining who will manage the budget, pay bills, and track expenses, ensuring transparency and clarity.
Have frank discussions on debt
Debts can be a significant stress factor in a relationship. Discuss and plan on how to manage debt, and how to reduce and eliminate it, to work towards a responsible debt-free future.
Save money together
Attaining financial goals as a couple can be an exciting experience. Start by opening joint savings accounts to put aside money for shared goals, such as weddings, vacation plans, and emergency funds.
Plan for Emergencies and Savings
Life is full of surprises, and unexpected expenses can pop up at any time. It’s essential to plan for emergencies by setting aside savings in case of unexpected expenses, such as medical bills or car repairs. Additionally, be sure to discuss your financial goals and create a plan for saving towards things like a down payment on a home, a dream vacation, or retirement.
Plan for retirement together
Retirement planning is a long-term goal that requires attention early in the relationship. The earlier you start saving towards retirement, the more you’ll have in your nest egg by the time you reach that stage.
Consider Life Insurance
While it’s not the most pleasant topic to discuss, life insurance is an important consideration when you’re in a committed relationship. Life insurance can help provide financial support to your partner in the event of your unexpected death. Discuss your options with an insurance agent, and make sure that both you and your partner are adequately covered.
Review financial accounts together
Regularly reviewing your financial accounts is critical in ensuring your finances are on track. As a couple, make sure to sit down and review your accounts together. This includes your bank accounts, credit cards, and investment accounts.
Seek professional financial advice
Finally, seek out professional financial advice. It’s an intelligent investment to periodically schedule sessions with a financial advisor, particularly when embarking on financial decisions that could affect your long-term goals.
Work with us
Our professional planning services at Robert Emmer with Silversage can provide the advice and guidance you need to help ensure your financial success. Our team of experienced professionals specializes in providing comprehensive asset distribution and wealth preservation strategies tailored to each client’s individual needs, and we strive to provide the best possible solutions to help ensure that their legacy remains secure for years to come.
Contact us today to learn more about how we can help you.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the author, and not necessarily those of Raymond James. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of strategy selected including diversification and asset allocation. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Financial and investment planning inherently involve potential tax and legal implications, with which we are generally familiar. We do not, however, practice as lawyers or CPAs and cannot give specific legal or tax advice. You should always consult with your tax advisor, or your attorney, when making complicated legal or tax decisions, however, we’re glad to work with your tax or legal professional to help you meet your financial goals. Raymond James financial advisors do not render advice on tax or legal matters.
Life Insurance policies have exclusions and/or limitations. The cost and availability of life insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Guarantees are based on the claims paying ability of the insurance company.