It’s unfortunate that throughout history, many women have relinquished control of their finances after getting married. However, it’s crucial for women to take charge of their finances and strive for financial independence, even while in a relationship. Financial independence means being able to support oneself financially without relying on someone else’s income.
It’s important for couples to have open and honest conversations about finances, especially since it can be a major source of conflict in relationships. Remembering the promise to support one another through richer or poorer is admirable, but it’s crucial to actively work towards financial stability and independence as a couple. Avoiding the topic altogether could potentially harm the relationship in the long run.
Commit to honesty and transparency
Couples should talk honestly about finances to avoid conflicts. It’s important to work towards financial stability together. Start by discussing childhood influences, attitudes towards money, and tricky topics like debt and savings. Transparency and teamwork can build a strong foundation for your financial future.
Financial goals and priorities
It’s always important to have a clear idea of what you’re saving for and how much you’ll need to save. This can help you to make smart investment decisions and ensure that you’re on track to achieve your goals. If you’re planning to buy a property in the near future, it may be wise to put your money in a savings account or money market account, so that you can access it when you need it. On the other hand, if you’re saving for retirement, you might want to consider investing in equities, which can offer higher returns over the long term. In any case, it’s important to have open and honest conversations with your partner about your financial goals and to work together to achieve them.
It’s crucial to have a clear understanding of your financial goals and sources of income, both as individuals and as a couple. Once you have identified these, it’s important to summarise your personal and joint expenses and decide how you will split them. It’s also a good idea to set spending limits and savings expectations. While it’s important to keep your separate bank account, you may want to consider opening a joint account for shared expenses. Remember to have open and honest conversations with your partner about your finances and work together to achieve your goals.
Plan for emergencies
It’s important to prepare for unexpected expenses by setting up an emergency fund. This fund should ideally cover three to six months’ worth of expenses for each individual in case of job loss, medical emergencies, or other unexpected events. You and your partner should work together to identify your personal and joint expenses and decide how much you each need to contribute to the emergency fund to achieve this goal. Remember to have open and honest conversations about your finances and savings goals to ensure that you are both on the same page.
Structure your financial plan
Having a plan is essential, whether you’re building a house or working towards your financial goals. A financial needs analysis (FNA) is a valuable tool that can help you understand your current financial situation, future needs, and goals. Retirement and estate planning, as well as risk insurance, such as death, disability, and critical illness coverage, are all important factors to consider. By creating a financial plan that addresses these needs, you can work towards achieving your financial goals and securing your future. Remember to have open and honest conversations with your partner about your financial goals, and work together to create a plan that works for both of you.
As you prepare for marriage, don’t forget to plan for your financial future. Each of you should have your own retirement fund and contribute regularly. Creating a legally binding will is also important to ensure your assets go to the right people and your wishes are carried out. Open communication with your partner is crucial in creating a financial plan that works for both of you.
Set for success
It’s important for couples to work together on their finances in order to prevent disagreements and achieve shared goals. However, starting this process can be challenging. Seeking guidance from a knowledgeable financial advisor can be a great help in creating a financial plan that suits your unique needs, providing peace of mind and a sense of security moving forward.
PSG Wealth, a division of PSG, provides a comprehensive wealth management offering, designed to meet the needs of individuals, families, and businesses.