Building a financial plan as a couple can feel pretty overwhelming. With busy schedules and varying financial goals, it’s easy to skip. But getting on the same page about money is important in a healthy relationship.It’s not just about budgeting, it’s about setting the stage for a secure future together.
If you’re not sure where to start or need a little guidance, don’t worry. At Circadian Capital, we make it easier for couples to create a plan that works for you. Whether you’re eyeing a new home, thinking about starting a family, or just want to make sure your finances are in good shape, we’re here to help.
In this article, we’ll talk about how you can build a financial plan without stress or confusion. We’ll cover the essentials, from open communication to retirement planning, with some helpful tips along the way.
Step 1. Start with Open Communication
The key to successful financial planning as a couple is communication. It’s not always easy, especially if you’ve got different financial habits or priorities. But being open about money is the foundation for everything. About 40% of couples say money is a major source of stress in relationships, and poor communication about finances often leads to unnecessary conflict.
Discuss Financial Priorities: Start by discussing what you both want. Are you planning to buy a home? Save for a big trip? Having a clear idea of what matters most to both of you helps set the direction.
Address Financial Fears: It’s also important to talk about fears or worries around money. Maybe one of you is more cautious about spending, or maybe there’s concern about job security. These conversations can feel tough, but they’re necessary to get on the same page.
What to Do: Set up regular check-ins where you talk about your finances. What’s working, what isn’t, and what you both need to do to reach your goals. Being proactive will keep things on track.
Step 2. Set Clear Financial Goals Together
Once you’ve had the money talk, it’s time to set some concrete goals. The beauty of working together is that you can create a vision that’s shared, so there’s no guesswork.
Identify Short-Term and Long-Term Goals: Think about what’s most important for you both. Maybe it’s paying off debt, saving for a house, or planning for kids. Write those goals down, both short-term and long-term.
Agree on a Timeframe: Don’t forget to set a realistic timeline. This helps you stay motivated and makes the whole process feel more manageable. It’s not just about having goals, it’s about having goals that fit into your current lifestyle
What to Do: Write down your goals, agree on timeframes, and create a plan that makes sense for both of you. A popular budgeting method is the 50/30/20 rule – 50% of income toward needs, 30% toward wants, and 20% toward savings or debt. MoneyHelper is another great UK-based resource for getting started with financial goal-setting. They’ve got free tools and guides to help couples plan their finances and track progress.
Step 3. Combine Your Finances (or Not?)
One of the big questions couples face is whether to combine their finances. Couples who combine their finances feel more financially secure, while couples who keep things separate sometimes feel disconnected from long-term goals. It’s a personal decision, and there’s no one-size-fits-all answer.
Let’s break it down:
Joint Accounts: Combining your finances can make managing shared expenses (like a mortgage or utilities) easier. It also builds teamwork and accountability. But it’s not for everyone.
Separate Accounts: Keeping finances separate allows each partner to maintain their financial independence. This can work well if one of you is more financially independent or well off, but it can make goal setting a little trickier.
What to Do: Choose what works best for you. If you’re unsure, you can always start by combining shared expenses into one account and keeping personal accounts separate.
Step 4. Create a Budget You Both Agree On
Creating a budget is crucial, it keeps things transparent and ensures you’re both on track to reach your financial goals. Couples who create a joint budget are more likely to stick to their financial goals and experience less stress about money.
Track Your Income and Expenses: Start by tracking income and expenses so you can see exactly where your money is going.
Agree on a Spending Plan: Once you have a clear picture, agree on a spending plan. How much will each of you contribute to shared expenses? And how much can you set aside for savings or fun?
What to Do: Get into the habit of tracking your expenses together. If you’re finding it hard to stick to a budget, tools like Honeydue and Lumio can help you keep things organised and realistic.
Step 5. Build a Financial Safety Net Together
Life is unpredictable, and having a financial safety net means you’re both prepared for the unexpected. Couples with a solid financial safety net experience less stress about money and feel more confident about their future.
Emergency Fund: An emergency fund is your first step in building a safety set. Aim to save at least three to six months’ worth of living expenses.
Insurance Coverage: Discuss your insurance needs as a couple. This includes health, life and home insurance. If anything were to happen, you want to make sure you’re both protected.
What to Do: Start by building your emergency fund. Even small contributions make a difference. Once that’s in place, review your insurance coverage regularly and adjust it as your life changes. And secure your financial future with an estate plan.
Conclusion
Building a financial plan together doesn’t have to be stressful. It’s about communication, shared goals, and working as a team. With these steps, you can create a financial plan that works for both of you, no matter where you are in your relationship.
If you’re ready to take control of your financial future, check out these financial tips. Whether you’re just starting out or refining your plan, we can help you create a strategy that fits your unique goals.