Marriage is a life-changing experience. It involves many responsibilities, whether taking care of the household chores or managing finances. Each activity requires a joint effort, therefore, it is crucial to plan well in advance.
Financial planning is one of the most important aspects that both partners must discuss in order to achieve goals, jointly and individually. With planning, communication, and mutual agreement, you and your spouse can build a path to financial growth and a legacy for future generations.
Today, we will discuss how you can jointly chart the course of your financial journey. Let’s devise a plan that works both ways.
Tip 1: Consider a joint account
As individuals, you may already have separate savings accounts. But, as you both step towards this new stage of life, creating a joint financial plan is important. You should consider opening a joint account, which can be allotted for shared financial goals, such as new home purchases, travel expenses, etc.
Joint accounts are also beneficial when applying for loans, such as home or car loans. On the other hand, individual accounts can be used to handle personal expenses. This allows both partners to enjoy financial independence and lessen the burden on one person.
Tip 2: Build an emergency fund
Life is full of uncertainties. And to tackle the challenges associated with unexpected situations that can cause financial strain, you need to build an emergency fund. Be it medical emergencies or income loss, an emergency fund can provide you with adequate finance when you most need it.
You can consider a high-interest savings account to build this kind of savings. Many banks, like Kotak811, even provide up to 7% interest p.a. This way, your money will grow, and you will have a substantial corpus to face unexpected challenges as a couple. It acts as a safety net, providing financial flexibility during challenging times.
Tip 3: Explore avenues to make investments and save taxes
One way to go about this is to make investments that not only maximise your returns but also reduce your tax burden. There are a lot of options you can explore as a married couple. Some of the investment choices are fixed deposits (FDs), systematic plans (SIPs), mutual funds and more. Some other avenues of investment include stock market, real estate and gold.
For those who want to save tax can consider options such as Equity-linked Savings Schemes (ELSS), Public Provident Fund (PPF), National Pension System (NPS) and more. Depending on your situation and needs, make smart investments by diversifying your portfolio. For financial protection, you may also consider investing in life, health and property insurance. Store all your valuables in a locker that you can open in a joint name for enhanced security.
Tip 4: Plan for bigger financial goals separately
If you are planning to save for life events like buying a new home or a child’s education, it is necessary to carefully plan and work towards building a disciplined savings habit. For that, you need to start by setting goals and defining the timeframe and resources for building these funds.
You can consider a separate account offering high returns to manage and grow your money effectively. And if you are considering a loan, you should evaluate factors like interest and repayment schedule. Choose a lender that offers more flexibility and covers your debt. Opting for a loan can help you achieve your financial goals and maintain stability.
Tip 5: Make a plan to manage debt
If one or both of you have existing debts, create an action plan to manage them. You can consider creating distinct budgets for personal expenses and expenses, along with a bill-paying checklist. For loans, you should prioritise paying off high-interest debts. This will free up funds for savings and investments.
Be it your budget or financial goals, you should periodically review and revise them. As your needs and wants change, you should re-evaluate and adjust them. This will keep you and your partner on track. To better manage your money as a unit, create a balance between savings, investments and expenses.
Endnote
Divide and assign responsibilities so that each one takes part of the overall financial responsibility. Try to keep as little as hard cash at home. This habit can help you limit your spendings. It is also a way to keep your money safe and secure. Furthermore, you can utilise your money in the bank account with a debit card. Whether you are paying bills or making purchases online, you can earn rewards in the form of cashbacks and discounts to minimise the amount on your spendings.