Sharing the load: Couple’s guide to financial planning for a successful relationship

When we dine with friends, we split the bill. Do we do the same when we eat with our special someone? Some might say, ‘Why not?' while some might feel it unnecessary.

Ask any happy couple who has been together for years and they will tell you love is never enough to sustain a healthy relationship, especially a marriage. Navigating finance with a partner can be tricky, awkward, and necessary.

Navigating financial planning as a couple: 6 key tips to follow

11 months agoPHOTO GALLERY

Just as having discussions about career goals, health and boundaries are essential when entering into a serious relationship that stands a chance to fruition into a marriage, discussing finance too, is crucial.

Financial planning between couples, married or unmarried, involves many factors from chalking out a budget to taking care of expenses as well as investments.

If you have been racking your brains behind how to approach this subject with your partner, we have three relationship experts directing you towards the right path.

Mansi Poddar, psychotherapist and founder at Heal.Grow.Thrive Foundation says, "For any couple to be able to discuss finance, trust and transparency are paramount." According to her, the first step towards couple financial planning is to work on building trust. She says, "Both partners must be honest about their spending, loans, debt, and monthly income. It is only in the existence of this transparency can a couple aim at building a healthy financial understanding between them."

Expanding on the same, Rhea Joseph, psychologist at Cadabams Hospital, consultant psychiatric social worker and relationship therapist says, "Failure to maintain transparency might not only lead to misunderstandings but could be perceived as a breach of trust, potentially straining the relationship. When financial matters are undisclosed or misrepresented, it can breed feelings of betrayal."

Anuradha Gupta, founder and CEO, Vows for Eternity also adds, "Taking part in financial decision-making together is critical for two partners to ensure a long-term committed relationship. It greatly influences what is to follow throughout life."

The need to discuss finance
Financial planning helps a couple to live a harmonious life free from financial stress. Couples in a serious relationship heading in the direction of marriage must have a clear financial structure in place.

"Today, as both partners are increasingly financially independent, the focus has shifted from a financial need to a conscious choice of being interdependent," says Gupta.

The magic of a partnership lies in the confidence that financial comfort brings, allowing partners to lean on each other not out of necessity but with a genuine desire to support and strengthen each other. This fosters a deep connection, making the relationship or marriage risk-averse and abundant, both financially and literally.

Financial planning also helps couples understand each other's money habits and what to expect from each other post-marriage. It helps couples discuss what works and does not work for them and thus head towards developing a unified financial strategy.

Josephy adds, "Couples must strive to reach a middle ground. Seeking therapy can be instrumental, especially when conflicting views persist."

Healthy financial habits
In present times where everything seems to be getting costlier by the day, financial planning becomes crucial for couples aiming to live life a certain way.

For starters, Poddar stresses having discussions about money and finance with your partner quite often or at least once a month. Besides discussing, she also mentions always keeping the partner in the loop when making any financial decisions. This applies to even unmarried couples. Informing your partner of planning to make a big purchase before actually going ahead with it, goes a long way. This not only helps build trust but also makes the partner feel valued and respected.

Being aligned on key financial matters is integral to the well-being of a relationship. Gupta opines, "Love is never enough to sustain a marriage. I wish air, water and love made the world go round, but they don't. Practicalities always kick in and lead relationships to a breaking point if the couple isn't aligned on financial planning and spending habits."

For couples wanting to practice shared financial management, the boundaries in their relationship should be well-defined and yet must maintain fluidity so the couple has enough room to navigate through anything life throws their way.

Always have clarity regarding what you want as a couple. Be it in terms of your envisioned life, a home, where you want to live, your children, their education, etc. All of this depends on a couple's finances.

Plan how much to save and how to spread it over the different asset classes, depending on the liquidity you need. Get into the habit of regular financial check-ins, and don't shy away from making room for individual goals.

Make allowances for each partner's aspirations, leisure time and career breaks, allowing flexibility in the financial plan and your shared future.

An ideal financial plan for couples
There is no one specific way to go about planning your finances. Couples must stick to what works best for them. While some couples may choose to keep their finances separate, some might prefer clubbing the incomes and sharing expenses while some might choose to strike a balance between the both.

However, for those lost in this maze, Gupta and Joseph lay down a simple blueprint.

Joseph says, "Distinguishing between common and individual expenses is vital. Joint responsibilities like rent payments, should be shared, while personal expenditures, such as phone EMIs, should come from personal budgets."

Gupta adds, "Keep your budget realistic and flexible, considering all your income sources and categorising the expenses. The idea is for each to take accountability and accordingly allocate funds for savings, emergencies, and personal discretionary spending. It is a straightforward act to avoid conflict. Reviewing and adjusting this budget regularly will ensure that each of you feels heard and seen in making financial decisions."

Implementing strategies, like joint accounts or dividing responsibilities for specific categories, helps in efficient financial management. Leveraging online tools and platforms can also streamline the process.

Gupta suggests, "A certain percentage of the money each partner makes, ideally a one-third, should go into a joint account, while the other third goes into covering compartments that one is financially responsible for, and the remaining goes into an individual account."

Couples can also maintain individual autonomy while collaborating on shared responsibilities, toeing the line between independence and mutual support. It allows you to pursue your goals and make career choices without being held back or compromising your aspirations.

Flexibility in financial planning is crucial. Josephy suggests against setting hard and fast rules. Instead, mutual agreement and joint discussions should guide financial decisions. Imposing strict structures can lead to conflicts, whereas openness to concerns and adaptation promote a more harmonious financial partnership.

Even in instances of overspending or deviation from agreed categories, clear communication and boundaries are essential.

Parent's involvement in couple's financial planning
When speaking about future planning for couples, we hardly think of parent's involvement. However, this aspect cannot be dismissed as irrelevant given that most individuals in committed relationships, especially in India, might not have complete financial independence.

Poddar sheds light on men and women who contribute towards running their own family business and thus, don't necessarily earn a monthly income. The financial decisions in such individual's lives are largely driven by their parent's actions.

This can especially be a matter of concern for women marrying men belonging to families where the financial decision rests in the hands of elders. In such cases, Poddar suggests having a clear communication of what finance would be like post-marriage.

"In my pre-marital counselling sessions, this is a major topic of discussion, especially with people who are entering patriarchal setups where the finances are in control of the inlaws. Family businesses in India, even today, operate in a way where women are kept out of financial matters," says Poddar.

In such cases, she suggests, it is always better to ask relevant questions like what kind of autonomy will one have over their own earned money, who will be the decision maker when it comes to the expenses of a couple, what kind of financial freedom will a couple have after marriage, and more.

The best solution to avoid the ills of patriarchal control according to Poddar is having financial autonomy, especially for women.

Red flags concerning financial transparency
Two people have to be on the same page on their vision of a future. However, financial planning for most couples can be a tumultuous journey. Experts list below some of the red flags that couples must look out for:

A big red flag is when the spending habits are vastly different. If one is very frugal and the other has a taste for the finer things in life, it can complicate things.

Similarly, if two people are both spendthrifts, then effective planning and execution of a budget could be challenging as each may need help to adhere to a cohesive plan.

Further, sometimes, if socioeconomic backgrounds are vastly different, they influence partners' spending habits and make it harder to bridge the gaps.

Another major red flag is one of the partners does not have financial independence and their finances are largely controlled by the family.

A partner not being open about their finances, debts, loans, salary etc. and being unavailable to have conversations about finance is also a red flag.

The significance of financial management within a couple's relationship cannot be overstated. It's a delicate balance that requires open communication, compromise, and mutual respect. By embracing transparency, reaching compromises, and nurturing flexibility, couples can cultivate a healthier financial landscape, laying the groundwork for a more fulfilling and enduring partnership.