Everything about Investing Jointly As a Married Couple

source: twentyoverten

From planning trips to purchasing a joint Netflix account, from joining the gym to watching movies, couples love doing things together. But it is not just the small things. They also need to take major decisions like investing so they can grow together.

Although investments are typically made as individuals, investing as a married couple is very popular nowadays, which helps to achieve goals together. To help you better understand this matter, here is a quick overview of joint investment for couples.

A joint investment budget provides insights into what expenses are involved and how much you can save. To invest together as a couple, you must set up a budget to clearly understand how much you both need to contribute to reaching your goals.

However, before creating a budget, you need to decide many aspects, like how frequently and how much you will contribute. If you and your partner both earn a steady income every month, you may be able to contribute a fixed amount. If any of you are self-employed, the contribution amount may vary.

You should know the right strategies to set up a budget for investing as a married couple. Here is a step-by-step guide on establishing a joint investment budget for better understanding.

Step 1: Get Started With the Basic Things: Before setting up a budget right away, spend time discussing your financial habits, goals, investment approach etc. Understanding each other's money approach will help you both move forward in this matter.

Step 2: Set Your Financial Goals Together: Setting up a goal is the most important part as it determines how soon you can buy a car or a home or how much you can save for retirement.

Step 3: Determine Necessary Expenses: Necessary expenses consist of the monthly cost you must pay. This includes rent, EMIs, groceries, utility bills etc. By determining this, you will know how much monthly expenses are mandatory and save the rest.

Step 4: Calculate How Much You Need to Save: Determine how much you need to save to fulfil your goals in the future.

Step 5: Set up Discussions to Track Your Spending: As this is an investment done by both halves of a couple, they must discuss their progress and goals. So, the best practice is to discuss these things once a week or month to ensure a smooth investment flow.

There can be many purposes for which you should start investing as a married couple. These investments are mostly for couples' dreams and goals to fulfil together. Some of those joint investments include:

• Buying a house
• Buying your first car
• Saving for children’s education
• Saving up for retirement
• Medical Insurance

These investments depend on your age and the stage of life you are currently in. For instance, if you and your spouse are both in your 20s, you will probably save some money to get your first car. Similarly, when you reach the age of 30, you will need to start saving for your child's education.

Aimless investment does not work very well. You need to set goals for which you will feel the urge to save some amount. This will help you to determine how soon you will reach them. Divide your financial goals into long and short-term categories so that those can cover your future and present.

Short-term goals usually include saving for a trip, paying off credit card debt, saving for an emergency fund etc. These usually take one to two years to achieve. Setting up short-term goals will help your progress towards long-term goals.

Lastly, the most crucial is long-term goals. It requires the savings of almost your working life. One of the most important investment options for married couples is retirement savings.

Since you are investing as a married couple, there will be two kinds of goals: your shared couple and separate individual goals.

• Joint Goals: This includes buying a house or car together, funding your children's education, saving up for retirement, etc.
• Individual Goals: This is based on individual dreams and preferences. It may include buying your favourite camera, setting up a PC for yourself, enrolling on a course etc.

Investing together as a couple has proven beneficial for both partners. Benefits include:

• Stronger Sense of Equality: Shared finance creates a strong sense of equality and security. Your salaries do not need to be the same if you are both working. But investing together and combining finances that fund a significant portion of your expenses establish a shared ground for both of you. This can change the typical mindset of always thinking about personal income and help to plan for their shared future goals.
• Transparent Budgeting: If you know exactly how much you are spending and how much you are investing as a married couple, it becomes easier to track your joint budget and how long it will take to reach a goal.
• Increased Capability to Handle Emergency Situations: Marriage is all about having each other’s back in times of need. Investing as a married couple can better prepare you for emergencies that may require extra financial support. These events can be anything like a medical emergency or a sudden requirement to purchase something.
• Seamless Bill Payments: Some couples invest jointly just to pay the living expenses for the two of them after keeping other costs separate. It stops any one person from getting overburdened with expenses.

Tracking investment is a crucial part of investing as a married couple. As this is a joint financial journey, you should discuss how much you have worked separately that will help to reach the shared goals. A weekly budget discussion works well in this case.

Initially, you may need to have this discussion daily. Eventually, you can do it once a week or a month after you start understanding each other's financial habits as a joint investor. Additionally, you can take help from the various mobile applications which are specifically designed for couples to manage their finances.

Investing as a married couple may seem like a lot of hassle, but it comes with its own benefits. If you understand how to handle the pitfalls strategically, you will be able to enjoy the advantages of joint investment. It unlocks a door of living together with a sense of real togetherness. However, do not let this cause stress and disagreement in your relationship which will ruin the idea of saving together.