Six financial planning tips to help couples build wealth, secure future

Open communication about money, expectations and contributions is key, and a shared vision should guide investment strategies, liquidity management, and succession plans

Couples often face challenges in merging their financial lives, aligning their goals, and managing finances effectively. By merging finances and openly discussing your financial situation, you build trust and reduce the risk of disputes. However, good financial planning must necessarily have life planning at its core.

 

Here are a few tips to help couples build wealth together:

Set financial goals together

Open communication about money, expectations and contributions is key. A shared vision should guide investment strategies, liquidity management, and succession plans, ensuring both partners are aligned on risk tolerance, major purchases, and long-term financial security.

 

Recognising each partner’s roles, whether financial or non-financial, fosters mutual respect and transparency.

 

Address uncomfortable conversations early and involve your partner in significant financial decisions.

 

If philanthropy is a focus, align your goals through a charitable strategy that supports the causes both of you would like to support.

Insurance

Having the right insurance coverage is essential to protect your family from unexpected financial setbacks. Evaluate plans for maternity benefits, family floater options, adequate coverage amount, and coverage for critical illnesses and pre-existing conditions.

 

A suitable term life cover, with loan protection, is also critical.

 

Assess both partners’ needs thoroughly, as these may vary.

Save for your children

Start planning early for your children’s education. List anticipated expenses and create a structured investment plan. For example, if you aim to send your child to the United States for a post-graduation programme, consider investing in international stocks or index mutual funds. Account for inflation and currency depreciation when planning for overseas education. Consider government schemes like NPS Vatsalya, a contributory pension scheme under the National Pension System (NPS). Parents can contribute a minimum Rs. 1,000 per annum, with no upper limit. These contributions qualify for an additional tax deduction of up to Rs. 50,000 per financial year under Section 80CCD under the old tax regime.

 

However, prioritise your retirement plans over saving for your children’s retirement.

Pay your debt first

If either or both partners have existing debts, create a plan to tackle them. Focus on repaying high-interest debts to free up funds for savings and investments. Ensure the tax benefits from debt justify retaining it. Avoid financing luxury purchases through EMIs unless necessary.

Create an emergency fund

An emergency fund acts as a financial safety net, protecting couples from unexpected expenses and ensuring that short-term setbacks do not derail long-term financial goals. Whether facing a medical emergency or job loss, having liquid reserves prevents tapping into investments or taking on high-interest debt. Aim to set aside 6-12 months of expenses as an emergency fund before making long-term investments.

Plan for a happy retirement

While it is easy to focus on short-term goals, securing your future is equally important. Discuss your values, attitudes, expectations, goals and priorities with your partner before planning for retirement. Consider investing in retirement funds and seek professional advice to maximise your savings. Tax-efficient schemes like the NPS allow deductions of up to Rs 1.5 lakh under Section 80C and an additional Rs. 50,000 over and above 80C for those under the old tax regime. The scheme comes with a lock-in period until age 60. Sixty per cent of the corpus is tax-free on maturity. Employer contributions to NPS can also be very tax efficient.

 

Finally, money should be an enabler, not the end goal. Building wealth as a couple is about aligning your financial journey with your shared life goals. This cooperative approach not only enhances financial stability but also strengthens the partnership, enabling you to achieve shared dreams like funding children’s education, enjoying global travel, or retiring early and comfortably. Embracing these strategies ensures your wealth-building efforts are purposeful and mutually beneficial, reinforcing both the financial and emotional bonds of your relationship.

Essential tips for couples

• Set financial goals together
• Recognise each partner’s role
• Have uncomfortable conversations early
• Ensure proper insurance coverage
• Plan early for children’s education
• Tackle high-interest debts first
• Avoid EMIs for luxury purchases
• Create an emergency fund
• Prioritise your retirement and plan for it as a team 

  (The writer is founder and chief executive officer, Plan Ahead Wealth Advisors)