3 essential tips for setting financial goals as a couple

Whether you’re newly married or just getting ready to settle down with your significant other, it’s important to start this new life together on the right note. Thankfully, there are a few steps that you and your partner can take to strengthen your financial relationship and prepare for your financial goals. Here, we share a few important tips that you and your partner should consider as you embark on your life (and financial) journey together.

Getting on the same page about your finances

The first step in creating any financial plan as a couple is to take stock of your current finances and openly communicate your financial obligations from the start.

Make sure all paperwork is updated.

Before getting started, you both should ensure that your identification and relevant accounts are updated with current information. This includes updating the beneficiaries on your life insurance policy, for example.

Discuss your current financial pain points.

When you begin making plans with your partner, you will both come across some areas that need attention. This could be post-wedding debts or disagreements you might have had in the past about specific financial habits. While it’s normal to have these pain points, it’s important to recognise them and work on solutions together.

Plan and prioritise your financial goals.

Use a goal-setting system such as S.M.A.R.T. to brainstorm your short-term, medium-term and long-term financial goals and identify what matters the most to you and your partner. It is also a good idea to talk about personal commitments so that you can work on them without compromising your shared goals.

By letting the other person know your priorities now, you and your partner can avoid unnecessary tension later and plan for a future in which both of your goals can be met.

Putting your financial plans into action

Now that you have a better grasp of your financial circumstance, it is time to kickstart your plans to achieve your goals.

Decide how you will own assets.

Would you prefer to own assets individually or have joint ownership. For instance, some couples prefer to keep their credit card or savings accounts separate. Others open up a shared account, which can benefit the couple in many ways, like saving S$100 to S$200 on annual fees by using a supplementary card.

Calculate the costs of your goals.

Whether you want to buy a new TV or plan for your first home, you and your spouse will need to do some online research to estimate the cost. This will help you create a game plan for how much money to put aside each month to meet your savings goals.

Create a shared budget.

Discuss your monthly expenses, such as food, toiletries and even Netflix subscriptions, and draw up a realistic budget that addresses basic necessities, luxury items, and emergency funds. To start, take a look at the 50-30-20 rule, which deals your percentage of your income into three separate categories: 50% needs, 30% wants, and 20% savings. This rule is meant to help you and your partner cut back on unnecessary expenses and ensure the growth of your savings.

Divvy up the costs.

For every expense on the table, you and your partner should confirm who will be responsible for the cost. For example, you can cover groceries, while your partner pays the utility bills each month. Together, you should decide what is a fair share of financial obligations.

Staying prepared and financially protected

The true test of your relationship is not your shared priorities, but instead how well you handle hardships together. Stay one step ahead and be prepared for unforeseen circumstances by re-assessing your financial goals when necessary, to ensure that you and your partner are well-protected.

Start a savings account for rainy days.

In the unfortunate case that you or your spouse urgently require money to pay for medical costs or car repairs, an emergency savings account will come in handy. For instance, you can consider a high interest savings account so that your money grows over time instead of sitting stagnant in a current account, or devote some extra savings to bonds or investments.

Buy term life insurance to protect your loved ones.

Topics like death and disability are hard for couples to breach, but it’s important that you and your partner are prepared for the worst-case scenario. Term life insurance like FWD’s Term Life Plus ensures that your spouse and future children will be well provided for should something unfortunate happen to you. From as low as S$1 a day¹, you can enjoy a million-dollar coverage without the need for a medical check-up if you are in the pink of health². If you select the fixed premium option, purchasing term life insurance when you’re young and healthy not only gets you lower premiums but also a plan that becomes more affordable as your income increases. On top of your base plan, you may want to consider enhancing your coverage with additional protection such as Critical Illness or Total and Permanent Disability riders to provide you and your spouse extra financial security as you embark on new goals together as a married couple.