All couples need to do joint financial planning
Financial cohesion within partnerships ensures success
One of the most significant financial relationships one can have in life is the one with a life partner or spouse. Partners need to plan for financial security and success together. Joint financial planning for all the milestones of life is the secret to a sturdy and harmonious financial relationship with your other half.
How to create financial cohesion as a couple
1. Financial communication
There is a saying that “love cannot make a home where lies and secrets sleep”.
It’s important for partners to be honest about their financial realities and vision for the future.
Communication around financial needs, worries and goals will become more important as you work to build a partnership that meets the requirements of all life’s phases, from early marriage, to parenthood, sickness and health, retirement and old age.
2. Joint budgeting
A budget is the foundation and starting point to any financial plan, even for high net-worth couples. The trick to making it work is ensuring that both partners can and want to stick to it.
Both parties should agree that the budget is fair and just. Whatever may be left over of the monthly budget can be saved or invested to meet bigger financial goals in the future.
3. Joint financial goal setting
Couples need to agree on their financial goals and what they wish to prioritise. Be conscious about how much is needed for retirement, property investments, vehicles, education, travel or savings. Working in tandem can build trust and unity, and significant longterm prosperity.
4. Career and family planning
Globally, it is outdated to think that only women tend to take a hiatus from their careers to raise children.
Where childcare can be expensive, whoever earns the most between the couple often becomes the sole breadwinner while the other stays home with the children. If you and your partner are planning to have a family, it is important to have discussions about family planning in relation to each partner’s career and earning power.
5. Setting joint investment goals, including retirement goals
To achieve long-term joint financial success, couples must devise a unified investment strategy.
This could include having an overall view of their collective investments, knowing what each partner is invested in, etc.
6. Be clear about bank accounts and boundaries
Depending on your circumstances, you may decide to keep separate bank accounts, have a joint account, or a combination.
7.Establish your will
Ensuring that your partner and children will be cared for in the event of your death is one of the most important acts of love for any couple. It is also important to talk about estate planning when entering a second marriage.
Equally, it is essential that your partner can find the details of any life policies, retirement funds or other investments you may have, and also knows who the beneficiaries are.