Planning Your Financial Future as a Couple

by admin on May 1, 2011

A lot changes when you get married. Life was simpler when you were single – all you had to cover was your bills – both utility bills and restaurant checks – and perhaps save some. When you are sharing your home and life with someone, on the other hand, the financial aspects tend to get more complicated. The good part is that both of you earn, and you might end up saving money. You have someone to help you with the bills, and you’ll spend less on food because you will cook instead of eating out all the time. As we all know, cooking for one is a lonely chore. The bad part is that people will be depending on you, that is, if you decide to have children. You may also have elderly parents who are unable to take care of themselves and need your help. 

First, you need to make sure both of you are on the same page. If you want to save up for home renovations, but your partner is saving money to go traveling, you could end up fighting. You need to establish short- and long-term financial goals. Another issue involves your joint earnings. How much are you willing to save, if anything, from your monthly paychecks? If your income differs dramatically from your partner’s, is it fair to put aside the same amount or should it be proportional? What do you want to save for? What are your career goals? Is career growth bound to income growth and if so, how much are you making now and how much do you expect to be making in five or ten years?

There is a difference between renting a place and having your own one.  If you are renting, you should discuss whether you want to buy a house eventually. If you own a house, you might think whether you need a bigger one in the future. Discuss if you want children, and if you already have them, whether you want more. Can you afford it? Another problem can surface when two people with different financial attitudes get together. One is frugal bordering on cheap, the other is extravagant. This can be a hard one to solve, to the point where people consider divorce.

If that is your case, consider a prenuptial agreement. It can save you a bloody battle if both of you end up hating each other. No one thinks of the divorce courts when getting married, but there are cases in which you should consider a prenup. For example, if you have a trust fund, expect an inheritance, or own a business, it is wise to spell out the way these will be handled.

You should also discuss when you both hope to retire. Are you saving for retirement or will you rely on your pension, whatever it may be?

Think of whether you should have an emergency fund, like savings for a rainy day. You may not even want to think about something bad happening to your family, but this is an issue that should not be avoided. Accidents happen, plain and simple. You really should have an emergency fund, and you should try to convince your partner to help you with that. If either of you has a business, you should discuss the outlook. Can you rely on profits or do you have plenty to worry about in these times of crisis, like going under? What can the two of you do to prevent that and is your partner willing to help?  Plenty of questions to discuss. Don’t postpone it.

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