Marriage is all about sharing your life with your better half. Your finances are a part of that life and how you both handle your finances together can have a major impact on how your marriage will endure the test of time.
Here is a 5 step guide to get you on the go with a plan to manage your finances mutually.
- Discuss your incomes and your spending habits: Honesty is vital in relationships when it comes to managing your finances. Knowing about each other’s income and expenses can help you plan how much you can afford to spend, save towards mutual as well as personal financial goals.
- Break up your money into what you will spend together on and what belongs to each of you individually. Settle on accounts, joint or separate? If you go for a joint fund then make a decision what it will cater towards. Some couples favor separate accounts for each partner along with a joint account into which both of you will pool money to cater for joint expenses. With this approach, you can think about your needs as well as of your family.
- You both must save at least 20%-30% of your joint incomes to cater to your savings. Savings have to be your main concern after catering for non-negotiable expenses like rents and EMIs. These savings can be invested appropriately on your financial goals, such as retirement.
- You have to be clear about your short term and long term goals and prioritize them. You both can maximise your investments towards these goals. The advantage of dual income is that you can meet goals quicker, even if they are now bigger.
- It is now imperative for both of you to take term insurance plan and also a health insurance for the both of you as a family. It will not only secure the living spouse but your children as well in your absence. The cover amount should be a 10 times your annual expenses.
By taking these 5 simple steps you can jointly manage your expenses and can make a happy and blissful life not just for you two but for your children as well.