Financial planning tips for couples on how to handle money wisely
For every couple irrevocably in love out there, there is but one elephant in the room that has to be addressed.
According to the Prudential Relationship Index, 41% of the 500 Singaporean surveyed fight with their partner about money. When you and your significant other decide it's time to take things to the next level, planning your finances is one of the most essential things to do. Money is one thing that can either make or break a relationship. It's how a couple can build a future together — as a team. Apart from that, being on the same page as your partner on your finances can even improve your financial wellbeing and strengthen your relationship. To help you get the ball rolling, Value Champion shares a few tips below.
Learn about each other's spending habits
Find out more about how each other spends their money. For example, what you buy may seem essential to you, but it may seem like a waste of money to your partner. Learn more about your spending habits and adapt to each other's way of managing their money. Find a common ground, if one of your is a spender, try to agree on some limits and set your intentions clear.
Draw up a financial plan and budget together
Being in a relationship requires teamwork. When you're both on the same page about your income, expenses and other financial topics, it's much easier to plan, budget and works towards your goals. Make an effort to draw up a budget together. This may help you keep track of your salaries and how you spent them as well as find ways to help improve your finances.
Share your financial responsibilities and save up for some common goals
In a relationship, one of you may be more interested in finance than the other. But it is vital to divide your responsibilities. If responsibilities are not divided, and if something happens to the partner handling your finances, your financial foundation will start to crumble. Save for an emergency fund and think ahead for your future. You may want to save up to maybe someday buy a house, start a family or further down the road, retirement.
Consider setting up an account for each other to spend
Nobody likes being judged for how they spend their money. Consider having an account each just for spending. This way, each of you gets to spend money without getting judge by your partner. This is especially important if one of you is a shopaholic.
Compare your spending habits against your goals
Take some time to think about your future goals. Think about what is realistic and what is achievable. Compare and understand how much money is coming in and how much is going out. Learn how much you can save and how much money goes into your essential budget for things like your bills. If your money habits don't match your goals, perhaps its time to make some adjustments.
Put the important things first
Review your health and life insurance. Get the important and essential stuff done like getting insurance for your vehicle, home, and many others. If your planning on buying a house down the road, work out what you can and cannot afford first.
Planning your finances ahead may seem daunting, but it is a vital part in life and doing so can help strengthen your bond with each other as well as save you a ton of grief down the road.