Dollars and Sense: Financial Planning for Couples

There’s simplicity in the single life, especially when it comes to your personal budget. The buck actually stops with you when an ultimate decision needs to be made on where to spend your money. But life comes at you fast though, and your financial circumstances can change as quickly as your Facebook status once a romance becomes official.

“Being in a committed relationship comes with a whole set of emotional considerations that new couples will surely experience through friends and family,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “Ideally, your financial decisions should be based more on facts than emotion, as these decisions will set the course of your new life together.”

Degrees of Separation

Moving in together represents a next step in a relationship for many couples, but it’s also a financial decision – one that likely begins with a conversation about redundant expenses. After your relationship gets serious, maintaining 2 homes and all the bills associated with each feels less like independence and more like a waste of money.

Consequently, saving through consolidation is easy. Deciding what to do with it may require a conversation. For starters:

  • If you plan on marriage, the actual wedding can cost tens of thousands of dollars before you even book the honeymoon.
  • Having kids? Have a plan, as most couples try to set aside money for hospital expenses before a birth, to say nothing of the subsequent responsibility of raising a child.
  • Regardless of family size, is home ownership your eventual goal for residence? Down payments don’t materialize overnight.
  • Finally, after you’ve lived your working years together, how will you retire?

But those are all big, life-defining choices that couples have to make. Exponentially lower on the scale of weighty dinner conversations are financial considerations that will define your money management together.

Before discussing when and where you’ll retire, you could start by recalling who is the beneficiary on retirement accounts and insurance policies meant to pay for your golden years. Once your relationship has become serious, it may be time to demote a sibling or parent to the secondary recipient.

Coupling Finance and Romance

When you really start considering the monetary implications of living your lives together, every couple has to find their own lines between “yours,” “mine” and “ours.”

Debt is a thorny, complicated issue that evolves as your relationship progresses and can dramatically alter your individual credit score as a result. If your investments remain separate, you should at least consult with each other about general goals to avoid overexposure. In both scenarios, aggregating your individual investments and debts will give you a holistic starting point to help shape your retirement picture together.

Discussing the long run has its own complications for some couples, but others can get tripped up in monthly budgeting. Savers who realize they’re dating a spender – or vice versa – need to find common ground on income requirements, comfort with debt and whether merging finances into joint accounts would simplify or complicate the relationship.

“Achieving your personal goals with the support of a healthy relationship is a wonderful thing,” said Correnti. “But retirement planning for couples has the best chance for success when both parties have a shared vision for its outcome.

Read More: Learn how to save throughout your life.

The content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

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