Whether you’re getting serious or getting married with your significant other, you might start thinking about your futures together, especially financially-wise, so that you can achieve your desired milestones in life. Planning and working towards your financial goals together can be a motivating and bonding experience, so here’s a few essentials tips that you and your partner can consider when setting financial goals:
The first step before creating any goals or plans as a couple is to take a step back and assess your current financial situation. You should also take this opportunity to communicate with your partner openly about your financial commitments or obligations.
- Ensure that all paperwork is up-to-date. Make sure that both of your identification and relevant accounts are updated with the latest information, such as updating the beneficiaries of your insurance policy.
- Discuss your current financial difficulties or pain points. Before you start making any plans, you might come across certain issues or pain points that needs to be addressed, such as post-wedding debts or past disagreements about certain financial habits. Try to communicate openly and resolve it constructively together.
- Identify and prioritise your financial goals. Using a goal-setting strategy, such as S.M.A.R.T., brainstorm your short to long-term financial goals. Identify what’s most important to you and your partner, and discuss about personal commitments as you try to balance and work on them together without compromising your shared goals.
This is an important stage to communicate with each other on your financial commitments and priorities, so that both of you can be clear and avoid any unnecessary conflict or misunderstandings later, as you work towards a future which both of your goals can be met.
Now that you both have a clear picture of each other’s finances and priorities, you can now kickstart your plans to work towards your goals.
How will assets be allocated? Do you prefer owning your assets individually or have joint ownership? Some couples prefer keeping their savings accounts or credit cards separate, whilst others open up a shared account, which can benefit the couple in several ways, such as saving S$100 to S$200 annual fees by using a supplementary card.
- How much does your goals cost? Whether you’re planning for your wedding or first home, you and your partner should do some research to gauge how much it will cost you, so that you can create a financial plan on how much to put aside every month to meet your savings goals.
- Have a shared budget. When you’re staying together, you should discuss your monthly expenses, such as groceries, food, toiletries or even internet subscription. Plan a realistic budget that includes basic necessities, occasional pampering and emergency funds. You can follow the 50-30-20 rule to decide how to allocate your income: 50% needs, 30% wants and 20% savings, to cut down on unnecessary expenses, while growing your savings.
- Share the costs. For every shared expense, you and your partner should discuss beforehand to confirm who will be responsible for the cost. For example, you can cover groceries, while your partner will be responsible for the utility bills. In essence, you should decide together what’s a fair share of financial obligations for each other.
The true test of every relationship is how well you handle hardships and difficulties together. Be prepared for the unexpected and stay one step ahead by re-assessing your financial goals when necessary.
- Build your savings for emergency. Sometimes life throws us a curveball, where you or your partner urgently needs the money to pay for medical costs or car repairs. This is where an emergency savings account will be helpful, otherwise it might be difficult to find cash on a short notice. You can consider starting a high-interest savings account so that your money can grow over time too, instead of sitting stagnant and losing to inflation over time in a current account. You can also consider putting some savings into bonds or investments to make them grow more.
- Get a term life insurance to protect your loved ones. Topics like death and disability can be hard for couples to discuss, but it’s important that both you and your partner are prepared for the unforeseen and unfortunate. You can ensure that your partner and future children will be well provided for if something unfortunate happens to you, if you have a term life insurance like FWD’s Term Life Plus.
From as low as S$1 a day, you can enjoy a million-dollar coverage, without needing any medical checkup if you’re healthy. If you opt for the fixed premium option, purchasing the term life insurance when you’re healthy and young not only will get you lower premiums, but also a plan that becomes more affordable even when your income increases. You can also consider enhancing your coverage with additional protection, such as Critical Illness or Total and Permanent Disability (TPD) riders, to give you and your partner extra financial security as you start your new life together as a married couple.
Limited offer: Enter promo code INTLP25 for 25% discount! (Promotion valid till 14th January 2022)
This is for general information only and does not constitute financial advice. This advertisement has not been reviewed by the Monetary Authority of Singapore.