Unconventional advice for financial planning as a couple

Unconventional Advice for Financial Planning as a Couple

Money can be a touchy topic, especially in couples, married or otherwise. As if handling your finances alone weren’t complicated enough, having to factor in someone else’s throws even more considerations into the mix. Are we spending the same amount? Should we commingle our savings? What happens if we were to separate? With this many questions hanging in the air, financial planning as a couple can seem like a whole ordeal. That said, a structured, mindful approach to the process can make discussions about money with your partner a lot easier. For unusual tips on financial planning as a couple, read on!

#1 Combine your savings, but not completely (at first)

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This applies especially to unmarried couples or those with unequal spending habits. Regardless of how you spend, saving as preparation for the future (foreseeable or otherwise) is important. With this in mind, agree with your partner on a fixed sum of money each month to place in this repository, preferably a joint account where the money can rest untouched except in emergencies, or in events – again – agreed upon by both parties.

This arrangement not only ensures that both parties contribute equally to joint savings, but also minimises the possibility of disagreements concerning expenditure. Realistically, not all couples commingle their savings completely, even after a very long time. Particularly for couples with no immediate plans to marry, separating your savings to a reasonable level of comfort is crucial. Each couple is different, so choose arrangements that you and your partner can agree on.

#2 Treat yourselves, fairly

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Saving money is frequently portrayed as a stressful experience emblemised by the person standing in the supermarket isle – better and more expensive or cheaper and less healthy? Saving need not be this extreme! By carefully partitioning your money as a couple, you can still enjoy life while keeping enough for the future.

This goes well with the previous tip – on top of saving a fixed amount every month, set aside a smaller but comfortable amount of money to spend on whatever you want. These are classified as lifestyle expenses, separate from necessary expenditure on food, toiletries, transport and so on. For couples who prefer spending together, this ‘lifestyle’ budget can be a joint one, but those with more individual needs such as collecting watches and bags, may consider budgeting individually instead.

As with all things in relationships, this approach works best when both parties are open and honest about their spending habits. Let your partner know what you spend most on, and also be receptive to receiving feedback on how better to manage your personal expenditure.

#3 Give allowances for unexpected circumstances

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When faced with unexpected events, flexibility and the ability to adapt can make all the difference. The same applies to your finances. For the most part, this means ensuring that you and your partner have enough savings to afford any unexpected expenses. How do we get there? Investments are a popular next step, but require careful attention, and the risk that accompanies purchasing such securities takes intuition to navigate – intuition that not everyone can claim to possess.

What other options are there? Another viable option is purchasing an insurance savings plan, which can help you grow a certain sum of your savings parallel to your regular savings. This way, you can maximise your savings with a guaranteed interest rate for a specified amount of time, while worrying less about the future.

#TiqOurWord What’s better than an insurance savings plan? The answer: a whole life insurance savings plan that that allows you to make top-ups and withdrawals without penalty and interest clawback after just 90 days. With ELASTIQ, enjoy a high guaranteed crediting rate of 1.80% p.a. for the first 3 years. While helping you save for your long-term goals, ELASTIQ keeps your funds always be within reach, whenever you need them. Now that’s what we call flexibility!

#4 Invest in good life insurance for sole breadwinners

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This one speaks for itself. If only one person in the couple is working, then you need to ensure that the other party and all other members of the family will have help moving on in the unfortunate event that the employed individual were to pass on earlier than expected. Insurance savings plans like ELASTIQ can help you to save for the long term, while also providing a death benefit upon death of the insured. Mortality is never a pleasant thing to consider, but knowing that your partner and your family will be looked after if something were to happen to you, can ease your worry tremendously.

In planning your finances together, remember to give your partner some breathing room, and also to treat them as you would like to be treated yourself. Beyond this, there are no golden rules on how you should manage money together, so feel free to experiment with different arrangements until you find one that works best! Pushing the envelope, the finances of some couples are managed by one person, while the other is given a monthly allowance (trust us, this works for some people). This example sounds a tad extreme but point is, don’t knock it till you try it.

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Discipline and trust

“Financial planning in a couple is easy,” said no one ever. As you realise your dreams together, afford one another the trust you deserve and be transparent with your goals and habits. In the meantime, keep disciplined and help one another through the process. If you have a budget drawn up, find fun ways to stick to it as a couple. Above all, remember to have fun, because surviving and even making light of something as serious as money together, can bring you closer. Hawker food today instead of a restaurant treat? Sounds good – you know he loves prawn noodles anyway.

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Information is accurate as at 17 September 2019. This content is for reference only. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. This advertisement has not been reviewed by the Monetary Authority of Singapore.

ELASTIQ whole life insurance savings plan is protected up to specified limits by SDIC. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid.