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Savings Account

5 occasions where couples should handle finances jointly

Summary: Should you combine finances after marriage? Here's a guide on why having a joint account and tackling expenses through it can be beneficial in the long run.

17 Sep 2022 by Team FinFIRST

Managing money can be a challenge even for the best of partners. Should you combine finances after marriage or keep money matters separate? Every household's financial requirements are different, and couples must evaluate and prioritise their personal and shared goals to arrive at an arrangement that works for them.

Here are five instances when combining finances and tackling expenses through account sharing can be beneficial in the long run.

Unpredictable income


If either or both partners are freelancers or entrepreneurs, their income will vary from month to month. It would therefore make sense to combine finances, at least for household expenses. Both partners can decide on a fixed monthly amount and deposit it into a joint account that they can use to pay for rent/maintenance, groceries, utilities, children's education, etc.

Making investments


If married couples pool money, they can get on a consistent investment plan for different shared life goals such as retirement. Additionally, a more significant investible surplus opens the door to various asset classes that have a high investment threshold – such as real estate, portfolio management services, alternate investment funds, etc.

 


Acquiring high-value assets


Just as with investments, acquiring certain assets may require a united effort. For example, while looking to buy a house, low-income couples or those with low credit scores may have to jointly apply to become eligible for a home loan. Even in the case of affluent families, you may need to combine forces if you want to upgrade to a bigger house, where one partner's income may not suffice for loan approval.

Creating an emergency fund


Unexpected issues can crop up at any time. It could be an emergency hospitalisation of a family member, unplanned travel, car breakdown, or even loss of income. All these issues need to be addressed right away. Couples can contribute to an emergency corpus to counter the financially draining impact of these sudden expenses. Sound personal finance practice suggests this fund should be equivalent to at least six months of the family's living expenses.

Repaying pending loans


Combining resources to pay off debt can significantly boost the family's financial and social health, especially in cases of loans that have been taken jointly or for the use/well-being of the family, such as a home loan, car loan, education loan, etc. A joint financial arrangement allows you to prepay long-term or expensive loans and save a lot of money on interest payments.

Conclusion


To keep a relationship healthy, you and your partner must communicate frequently and figure out how to tackle various expenses and outlays. Whether you are looking to save for a rainy day, invest for a secure future, or structure a loan repayment plan, IDFC FIRST Bank's new-age savings account allows you to manage all financial decisions from one place.

Gain more control over your finances with IDFC FIRST Bank's joint savings account.

 

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