A few years ago, men in the house took charge of the investments; women used to have limited say about that. However, times have changed, and women have entered the workforce; they now indulge in financial decision-making as much as the men in the house do. Therefore, it is imperative that both husband and wife collaboratively deal with the family's finances.
And for this to be successful, three 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 easy 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, to name a few. Figure out who pays what.
Share the responsibility of payments or own it up jointly; this would save your partner from taking away unnecessary burdens.
Now decide who would pay for the loans and debts. A well-planned budget brings with it multiple benefits and leaves scope for savings.
Then set targets:
While formulating a budget, don't just consider the present but the 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 not to get trapped in the current scheme of things; one must strategize a roadmap to achieve the targets. For example, prudently identify the share of the income you can 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 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, the retirement age, the amount in lump-sum or the form of pension expected, and expenses that would fall post-retirement will give better clarity. All this should be worked out, considering the couple's life expectancy.
- To illustrate – let us consider that the husband is three years older than his wife. Both plan the same retirement age and are expected to have the same life expectancy. The wife hence will retire three years after the husband's retirement. However, if the couple decides to retire simultaneously, the wife has to leave the workforce three years earlier. In such a scenario, the financials should be planned to support the wife, who would be expected to outlive her husband by three years.
- To sum up, the collaborative efforts of a dual-earning couple would create more disposable income, allowing them to have a better and improved lifestyle. The more financial visibility, the better achievement of goals one shall have.