Sharing your life with someone you love is one of the greatest joys you can have. However, many people don’t know how to navigate the waters of financial planning for the future when you are doing it with someone else.
When do you pool your funds together? What kind of conversations do you need to have? Let’s run through how you and your significant other can achieve your financial goals as a cohesive unit through clear and concise communication of your wants and needs.
Start talking about it early
No two people are going to have the exact same spending and saving habits, even if you are in tune in many other ways. That’s why it is so important to have a frank and open conversation about your money before committing to a financial investment plan together. As MoneySmart points out, you should cover the following:
- Where you are both at currently in terms of income and savings, and how much you are willing to pool together.
- What your goals are – it could be a young couple saving for an overseas holiday or a first home, all the way to retirement planning among older couples.
- How good you are with money. Is one partner a spendthrift, while the other likes to splash cash?
- Who will handle the finances. Will you both have control, or will one person make most of the decisions?
This large-scale, open conversation (perhaps with a financial planner) helps your relationship keeps its priorities balanced, can reduce financial stress, gets you both on the same page and sets up your long term goals. Talking about money can be daunting at first, but open conversation is the key to a healthy financial (and emotional) partnership.
For couples that are further along in their relationship, conversations still need to be had. Financial planning doesn’t end with buying a house and starting a family, it continues as you look ahead to retirement.
You can’t just snap your fingers and make this happen – you need to plan with your partner.
The Association of Superannuation Funds for Australia says that for a comfortable retirement, a couple needs $59,160 per year. You can’t just snap your fingers and make this happen – you need to plan with your partner.For example, which of you will enter retirement first? Could you benefit from starting an SMSF together? Will either of you continue working past the age of 65? Who will contribute how much to superannuation?
People can fall ill or pass away, relationships can break down just as readily as they flourish, and outside circumstances can affect your money. That’s why having ongoing clear conversations about financial planning with your partner is so important.
If you want help planning your life together, no matter what stage you are at, get in touch with the professionals at Invest Blue.
What you need to know
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.