The Money Talks. - Tips for Managing Finances & Investments As A Couple

First comes love, then comes the money talk...

Within a relationship, there are so many topics to cover – family background, moral, political or religious standings and on a lighter note, color preferences. The reason for these conversations, among others, is to establish compatibility, shared interests and a bedrock for the decision to share one’s life with a person. Whether we admit it or not, finance has become a key factor in the sustenance of most romantic relationships, nowadays. But it is concurrently baffling that we do not have enough conversations about how best a couple, married or dating, can navigate the topic of money in their relationship. These are some tips for the couple that wants to manage their joint funds:

• Start with the money talk Most people have a personal policy not to share details of their earnings, assets or liabilities with friends, strangers and sometimes, family. This is strongly discouraged for serious couples intending to spend a significant part or entirety of their lives together. Honesty about the earnings and debt of both parties gives the couple the tools and insight to map out their financial future. Some of the questions that help boost financial transparency include spending habits, budgeting styles, individual risk appetite, debt and debt management, savings, short and long-term financial goals etc.

• Combine your finances As a couple, you hope to make financial, investment or major purchase decisions together, having joint funds makes things relatively easier and is somewhat inevitable. One way to give each person some level of autonomy is to maintain individual accounts for personal expenses as well as a joint account for purchases or investments made as a unit.

• Think Family Wealth Management Although the unit is made up of two individuals with their personal financial goals, the couple as a unit, in planning their investments or finances, should implement an investment or financial strategy that helps them in effectively building and managing family wealth. For a younger couple, the goal should be to grow their assets and stay open to riskier investments. Investment options like equities, high yield notes, mutual funds etc. Couples with kids, or preparing for retirement, should lean toward investment options such as income, canary and money market funds. These investment options are highly liquid, low-risk and serve as a steady, additional source of income. These are some questions that can start off the money talk with your partner:

  1. What are your short and long-term investment goals?
  2. How much money do you want to save as an emergency fund?
  3. Do you consider yourself a risk-averse or high-risk investor?
  4. Would you be open to financial advisory if we determine we need it?
  5. What criteria should we consider when picking out an investment option?

  Have you had the money talk? Consider all your options and start planning your financially free future with gdl.com.ng.