Finance management: Simple tips for couples

For couples, discussing money, finance and the future is second-nature because doing so sets them on a path of financial security. Be it setting financial goals, discussing how to settle debt, or choosing which credit cards to opt for household expenses; every couple should understand financial management. But, this does not mean you stress on every little thing trying to nail them down.

In fact, financial management is quite easy to execute, if you followed a few rules. To begin, here are five simple tips:

Always set financial goals

When you’re in a relationship, your individual goals merge with your partner’s to become family goals. The two of you must sit down and make a list of all your retirement goals, such as the house you want to buy, the places you want to travel and the approximate amount of wealth you want to muster before a certain age. Think of it like going on a road trip where you’ll plan the route, the car you’ll take, the eateries to stop for a bite, emergency backup, etc. 

Share only the household bills

There is immense want among couples to share everything from food and drinks to social media account passwords and finances. Do not do it. If you share or merge your investments, there is a high likelihood of conflicts over money allocation.

The only thing you must share with your partner are the household bills. Open a joint savings account and deposit in it, every month, the money for bills and other household expenditures. Also, this makes it easier for the couple to know where the money is going.

Keep an eye on personal debt

At times, you or the both of you may struggle with debt. This could be money owed to someone or repayment of credit card bills or a personal loan. Instead of keeping this a secret from your significant other, sit down and make a plan on how you two together can pay off the debts in a phased manner. If needed, consult a financial advisor. Talking it out will make things easier and stress-free for both of you.

Consider opting for a joint housing loan

There will come a time when you two will want to buy a home; do it together. Applying for housing loan together increases your eligibility for a higher loan amount and both of you can enjoy tax benefits separately. The loan’s principal amount is eligible for deduction under Section 80C of the Income Tax Act up to a maximum limit of Rs.1.50 lakh. The interest payments on the loan offers tax deduction under Section 24 up to Rs 2 lakh, if the property is self-occupied. And the entire interest amount becomes eligible if the property is let out.

Invest in a life insurance policy

The very meaning of insurance is to protect your loved ones when you’re not present. So, it is but common sense to invest in a term policy. Set up an auto-debit of the premium from your savings account so you don’t miss the dates and risk the policy lapsing and remember to share all the details with your partner. Sometimes, getting your claim settled is the biggest nightmare you’ll face.  

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.