A few years ago men in the house took charge of the investments; women used to have limited say about that. Times have changed now and women have entered the work force; they now indulge in financial decision-making as much as the men in the house do. It is hence imperative that both husband and wife collaboratively deal with the finances of the family.
And for this to be successful 3 things are crucial:
1. Zero Ambiguity
3. Trust between the couple
Agreed? I’m sure most of you will.
Then let’s take a vow and start following the suggestions below instantaneously. Let us make this daunting task an easy one by handling funds efficiently and wisely.
First and foremost formulate a budget:
- Team up with your spouse and work out the list of expenditures - household expenses, bills, school/college fees and EMI’s to name a few. Figure out who pays what.
- Share responsibility of payments or own it up jointly; this would save your partner from taking away unnecessary burden.
- Now decide on who would pay for the loans and debts. A well-planned budget would bring with it multiple benefits and would certainly leave scope for savings.
Then set targets:
- While formulating a budget don’t just consider the present but future as well like:
- Education of children, vacation overseas, a second home; every couple would have different dreams; priorities and earnings would be the decisive factors.
- The idea is to not get trapped in the current scheme of things; one must strategize a roadmap to achieve the targets set. Prudently identify the share of the income you will be able to set aside or the surplus funds you can manage collectively for such goals.
- Remember a committed approach is the means to achieve a stable family budget.
Finally, accumulate for the old age:
- Life post retirement can be stable if planned well in advance and by the couple jointly.
- Chalking out a plan on when each partner wishes to retire, what would be the retirement age, the amount in lump-sum or in the form of pension expected and expenses that would fall post retirement would give better clarity. All this should be worked out taking into consideration the life expectancy of the couple.
- To illustrate – let us consider that the husband is 3 years elder to his wife. Both plan the same retirement age and both are expected to have the same life expectancy. The wife hence will retire 3 years after the husband’s retirement. However, if the couple decides to retire at the same time the wife has to leave the work force 3 years earlier. In such a scenario the financials should be planned such that it should support the wife who would be expected to outlive her husband by 3 years.
- To sum up, the collaborative efforts of a dual earning couple would create more disposable income and hence allow them to have a better and improved lifestyle. The more the financial visibility the better achievement of goals one shall have.