Conversations to have with your spouse
DECCAN CHRONICLE | Adhil Shetty
Money is often a touchy subject. When it comes to discussing it, many couples feel complete disconnect with each other. Even though they are life partners, they may feel a divided in terms of spending habits, investment needs, and even life goals.
Our hopes and dreams are tied directly with our ability to earn, manage, and grow our money. And since our spouses are going to partner us in actualising those hopes and dreams, it’s important to have them on the same page with respect to money matters.
Here are five strands to explore as you attempt discussing money with your significant other.
Know where you stand
It is important that your spouse knows where you are today. She or he must know what you earn, and what you have saved and invested. Sharing essential knowledge of your money such as the location of your savings and investments, netbanking logins, details of insurance plans, etc. should be mandatory. Should something unfortunate happen to you, you need your spouse to manage your finances. Additionally, you should also inform your spouse about your loans. Your spouse must understand how repaying a loan impacts your disposable income.
Take time to discuss your life goals with your spouse. Each of you may have individual goals along with your collective goals. For example, your collective goal may be buying a home, and an individual goal may be to pursue higher education. Each of these goals requires financial planning and systematic allocation of funds. Discuss how you are going to help each other achieve these goals, and what instruments you need for this. Once you identify these goals, it becomes possible to make the right investment choices and set forward on the path to wealth creation. For example, you may want to retire at the age of 60, which helps you realize that equity mutual funds will help you build your retirement corpus.
Bad Habits, Good Habits
This is often the matter where there is maximum disconnect among couples. Their money habits may be as far apart as the North Pole is from the South Pole. However, these differences in habits gave you the unique personality traits that brought you together as a couple. It's important to encourage good habits, but it's also important to recognise and curb bad habits. For example, you may have an out-of-control credit card spending habit, which could wreck your credit score, therefore making it difficult for you to take a home loan to buy your dream home. Be gentle with each other as you understand each other's habits. When you look to mend bad habits, don’t aim for immediate perfection. Rather, aim for a gradual trajectory towards good habits.
Discuss your fears
Couples often live in fear of the unknown. The question typically vexing them is, "What would I do if something happened to my spouse?" Last year, a woman from a wealthy family in Gurgaon made the hard decision to start a food cart after her husband was incapacitated in an accident. Losing your spouse means losing not just their emotional support but also the financial cushioning they provide. But there is no need to live in fear when you have insurance. If you have dependents, cover them adequately by buying life term plans, which are cheap and sizeable. Always have health insurance for all family members to protect against unforeseen and expensive hospitalisations. Also, insure your property. Consult an insurance expert to determine your insurance needs. Having the right insurance cover would ensure you peace of mind and freedom from financial fears.
It takes two to tango. You must split your financial responsibilities with your spouse and work towards them together. That means jointly saving money, jointly finding ways to invest, jointly tracking and settling your bills, and jointly getting better in your money matters.
Lastly, every plan you make, every decision you take, every budget you set, needs to be revisited and recalibrated as per your life requirements. Needless to say, you should do this together. Remember that money could be a sensitive matter, so it should be discussed with care, patience, and compassion.
(The writer is CEO, Bank Bazaar.com)