Financial Planning For Couples

10 Financial Planning Strategies For Couples

1. Open and honest communication
The first step towards successful financial planning as a couple is open and honest communication. Both partners should be willing to discuss their financial situation, goals, and concerns openly.

Transparency is crucial to develop trust and understanding, enabling you to make informed decisions as a team. You can share your financial histories including debts, assets, and spending habits, and create a plan for how to achieve your financial goals together. Being in a relationship means working together as a team.

2. Set common goals
Sit down and discuss your financial goals as a couple. These goals include saving for a down payment on a house, paying off debt, planning for retirement, having kids, or charitable giving. If you set these goals together, it will make them easier to work toward achieving them as a team.

After you have set some goals, you can decide how much money you need to save and where you should invest it. For example, if you want to purchase a house in two years, you may want to have this money invested in something semi-liquid and low-risk such as a cash savings account, T-Bills, or brokered CDs. This will ensure that you don’t risk your savings declining in value just before you need them. If you won’t need the money for ten years or so, you might be better off investing in stocks.

Make sure that your goals are specific, measurable, attainable, relevant, and time-bound (SMART) to keep yourselves motivated. Having some goals in place will give you something concrete to work together as a couple.

3. Assess Your financial situation
Take an in-depth look at your current financial situation as a couple. You can calculate your combined income, expenses, and assets, and calculate your net worth. Understanding where you stand financially will help you identify areas for improvement and prioritize your financial goals accordingly. It will serve as a foundation for developing a financial plan and making informed decisions regarding budgeting, saving, investing, and other aspects of your financial life as a couple.

4. Create a budget
Budgeting is a fundamental part of financial planning. When creating a budget as a couple, ensure that both partners have a say in the process and actively participate in decision-making. Make sure that your budget accounts for individual and shared expenses. Consider using budgeting tools or apps that allow for joint tracking and updating of expenses. Also, track your monthly savings goal.

A budget allows you and your partner to have a clear understanding of your combined income, expenses, financial obligations, and ability to save. It allows you to track your spending and identify areas where you may be able to make adjustments. By monitoring your expenses, you can ensure that you are living within your means and allocating enough money to reach your short and long-term financial goals. Regularly review and adjust your budget as needed. 

5. Merge or separate finances
Some couples prefer to merge their finances and others prefer to keep their separate. Each approach has its pros and cons so it’s important to talk about which option is best for your relationship. Regardless of the decision, make sure that both partners have a clear understanding of the financial arrangements.

6. Build an emergency fund
Building an emergency fund is essential for financial stability. Aim to save three to six months’ worth of living expenses in a separate account. Make regular contributions and avoid using them for non-emergency expenses.

It is one of the most effective ways of reducing financial stress because you know that you can cover an emergency if it arises.

7. Insurance and estate planning
Review any insurance that you need as a couple. This may include life insurance, health insurance, disability insurance, and home and auto insurance. Ensure that you have enough coverage to protect yourselves and your assets.

You can also establish an estate plan to ensure that your wishes are carried out in the case of unforeseen events. A financial advisor can talk you through each of these areas to figure out what is needed for your specific situation.

8. Retirement planning
Retirement planning helps ensure that you and your partner have sufficient funds to support yourselves during your retirement years. It allows you to save and invest strategically to build a retirement nest egg.

You can have an open discussion about the kind of retirement lifestyle you both envision, such as where you want to live, what activities you want to pursue, and any travel plans you have. By planning together, you can work towards shared goals and make financial decisions that reflect your mutual interests.

You both may have various retirement accounts, such as 401(k) and IRAs. Your retirement accounts and financial well-being can be maximized by effectively coordinating these. Retirement planning allows you to have a clear roadmap and a sense of control over your financial future. The earlier you start saving for retirement, the more compound interest will work in your favor.

9. Regular financial check-ins
Schedule regular financial check-ins to review your progress. This can be once a month or once a quarter. Discuss any changes in your circumstances, and adjust your plans if necessary. These discussions can help you stay on track, make informed decisions, and address any financial concerns before they become major issues.

10. Consider hiring a financial planner
A financial advisor can help you build a financial plan focusing on your goals and financial situation as a couple, so you can feel confident you’re on the right track. It’s not always easy to discuss finances. Most couples have no problem talking about dreams, work, family, and friends. However, when finances are brought into the discussion, people can feel uncomfortable. A financial advisor can help facilitate the conversation, offering objective advice and oversight to help you build your financial lives together. 

How should couples split bills?

Splitting bills as a couple can be approached in various ways, and the most suitable method depends on the preferences and circumstances of the couple. Have an open discussion with your partner about what you feel is more appropriate for your situation. Some couples do a  50/50 split, while others do it proportionally based on their income. This will be moot for couples who combine their finances. 

Am I liable for my partner’s debts?

Your state’s laws and the type of debt you have will determine whether you are responsible for your spouse’s debt. Make sure to bring all of your debts with you to your financial advisor so that they can analyze them and come up with a plan to pay them off.

Should we combine our finances after we get married?

Deciding whether to combine finances after marriage is a personal choice that depends on several factors. If you are thinking about combining finances with your spouse, or soon-to-be spouse, here are 4 key tips that you and your spouse can take to effectively combine your finances.

What to look for in a financial advisor for couples

When searching for a family financial advisor, it’s essential to consider several key factors to ensure you find a qualified and trustworthy professional who can meet your specific needs. Here are some important qualities and considerations to look for:

1. Qualifications and credentials: Look for a financial planner who holds relevant certifications such as a Certified Financial Planner (CFP), or Chartered Financial Analyst (CFA). 
2. Experience: Look for a financial advisor with experience working with people like you. As a result of working with various people, they will be able to provide valuable insights.
3. Fiduciary duty: Look for a financial advisor who is a fiduciary, meaning they are legally obligated to act in your best interest at all times. This will ensure no conflict of interest. Only a very small portion of financial advisors act as fiduciaries. 
4. Transparent fees: Look for a financial advisor who is transparent about their fees. Ensure that their fees are aligned with your expectations and that there are no hidden expenses.
5. Long-term relationship: Look for a financial advisor who prioritizes building a long-term relationship with clients. They should actively listen to your needs, goals, and concerns and tailor their advice accordingly. 
6. Trust and connection: Look for a financial planner who you can trust and with whom you have a good personal connection. You should feel comfortable discussing your financial matters openly and trust their judgment and advice.

Before making a decision, consider meeting with multiple financial advisors. Here are 8 important questions to ask each financial advisor. Trust your instincts and choose a financial planner who you believe can help you maximize your money and achieve your financial goals.

How District Capital helps couples with their financial planning

District Capital is a financial planning firm serving professionals and entrepreneurs in their 30s and 40s. We are passionate about helping couples navigate their financial journey together. 

We actively engage you and your partner in all aspects of financial planning including retirement planning, investing, cash flow analysis, taxes, insurance, and estate planning. We develop a comprehensive financial plan that reflects your shared vision.

We aim to empower couples by providing them with tailored financial advice, strategies, and education. We strive to help couples achieve their financial goals while strengthening their financial partnership and communication. 

Find a financial planner for couples near you

Talking about your finances may feel awkward, but it’s part of a healthy relationship. A financial advisor can help you make sound financial decisions as a couple.  If you want help with your finances and are interested in having a comprehensive financial plan, schedule a free discovery call with one of our financial advisors today.