#Couplegoals – Financial planning as a couple

Just married? Or figuring out financial goals as a couple? As a couple, it’s obvious that financial planning in the last thing on your mind, while you are still enjoying euphoria. Going on vacations, dinner dates, movies, parties etc. are the usual couple goals that the younger generation couples have these days. But, making the right investment decisions and being the ideal couple for many is the latest trend for couple goals. How successful are you at achieving it?

Mostly financial planning is postponed to when family planning is around the corner. Do you think that’s the best way? Well, No. As much as you are compatible and comfortable with your spouse, it is very important to have your mindsets in sync when it comes to financial planning. Who’s a better person to plan your finances with other than your spouse? Joint investments when done right is very fruitful for your future. Make sure your joint investments work in your favour.

Rather than having arguments over each other’s financial habits, it’s always better to discuss the matters and find common ground before its too late. The best way to do it is by ensuring the following:

  • Understanding each other’s spending habits
  • Identifying individual personal and financial goals
  • Consolidating individual assets and liabilities
  • Spending together
  • Tracking your expenses and Budgeting it
  • Creating an emergency fund
  • Updating insurance coverage

Below are the few popular joint investments that you can do as a couple:

 Medical Insurance:

There can be many unexpected events in life. Being prepared for them is very important. Being adequately insured is essential else one unexpected event can eat up all the hard earned money. Life insurance is needed to ensure even after a person’s death the family will not face any problem financially. Health insurance is important as the healthcare expenses are skyrocketing and without insurance, the savings will be exhausted.

Therefore, ensure that the plan you take covers for all the hospital admission charges and other medical and diagnostic charges. This safeguards your families from losing all the savings, in the event of a health emergency faced by a family member. The insurance cover amount that you should look at is Rs 5-25 lakhs. This will vary with the place you live too. If you are living in a metro city, then a higher amount of insurance is suggested. And also varies when you have kids. As per the Section 80D of the Income Tax Act, a family floater policy allows both the husband and the wife to claim a total tax exemption of up to INR 25,000 per year.

Home Loan:

You always dreamt of living in a home that you own. Independent villa or apartment, you need something that you can call your own and it surely needs to be fancy. With home loans available at such cheap interest rates, one can easily get a loan to buy or build a home.

Taking loans and being unable to pay them is very common. Home loan is one loan that usually prolongs for a decade and a half or even more. The loan can be defaulted due to many uncertainties like loss of job or death of the prime earning member of the family.

Therefore, taking a joint home loan will be a good idea, as the spouse’s income would be like a cushion during unforeseen situations. Looking at the tax benefits, an interest payment up to Rs 2 Lakhs and principal payment up to Rs 1.5 Lakhs can be claimed for deduction by each of you. Which means a total of Rs 4 Lakhs claim on interest payments and Rs 3 Lakhs claim on principal payments can be availed as a couple.

Emergency Fund:

Financial crises, wanting to quit your job immediately, an urgent need for a large sum of money to help a relative treat their illness, being fired from your job suddenly, etc. can leave you in a state of complete financial loss. It is for these unexpected reasons, that you always need to have a part of your savings set aside in the form of an emergency fund.

The most common question is How much should one invest in an emergency fund? Though this question may not have a universal answer, 6 to 8 months of one’s salary is a good amount to save in this fund. The requirements of a family and the sources of income may differ. Having a spouse who can share the responsibility of creating an emergency fund would help you save more for a safer and secure future.

Mutual Funds:

There are a plethora of investment options available for investors today. However, Mutual funds are one of the best investment vehicles. Fund houses allow the investor to hold their investments jointly with a maximum of 3 holders. This will help you and your spouse in planning your investments collectively. Investments into Mutual Funds can be done either through Lump sums or through Systematic Investment Plans (SIPs). These regular investments made at a young age would do wonders over the long term. Upwardly suggests you best funds to invest upon analyzing your profile and risk appetite.

Dream big, but not just alone. Make your spouse an active investor along with you. Let your financial planning be mutual and not just driven by one person. Having an extra helping hand while doing your financial planning will always help you in making better decisions. Always keep in mind one plus one is always greater than two (1+1>2).

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