How Couples Can Work Together to Build a Joint Financial Plan

Merging finances can be a stressful and complicated endeavor. But building a joint financial plan is an opportunity for couples to align their financial goals and work together toward a shared future. For those that are newly married or have decided it’s the right time to combine financial priorities with a partner, here’s how to build a stress-free joint financial plan. 

What is a joint financial plan?

A joint financial plan outlines a couple’s financial life, including goals, expenses, income, savings, investments, insurance, and more. It’s an opportunity to openly discuss wishes and shared priorities when it comes to money management. It’s important to note that pulling together a joint financial plan doesn’t necessarily mean couples are merging every financial account they have. In fact, there are several popular ways to manage finances as a couple, including:

Creating new joint accounts but keeping existing accounts separate: It’s common for couples to open new accounts together, whether a shared credit card or joint checking account. This often makes it easier to manage shared bills like those that stem from household expenses. Combining or sharing access to all financial accounts: This is for those couples who feel confident they’re ready to jump off the deep end. In this structure, all financial accounts are fully shared and available to each partner.

Keeping all accounts separate: It’s possible to share a financial plan while keeping accounts separate. In this instance, communication and transparency become critical, so each partner knows on a high level how much debt the couple is carrying or how much they have in savings.

Building a joint financial plan step by step 

There are several steps couples can take to create a joint financial plan that works for both partners:

1. Discuss short and long-term financial goals.

Step one in any great financial plan, whether solo or joint, is for couples to to define their goals. Partners should sit down with each other and discuss critical financial elements like how large an emergency fund they need, when they’d like to retire, and what types of purchases they want to save toward in the coming years.

2. Outline income.

Partners should work together to come up with a number that reflects all household income. Be sure to include income from full-time jobs and additional sources of income, such as from side hustles and real estate.

3. Figure out how much each partner is spending.

Honesty is critical in this step of building a joint financial plan. Outline each partner’s spending for the past 3 – 6 months and review it together. Partners can work to identify areas where they may be overspending and places where they can afford to spend a bit more.

4. Develop a budget that works for both partners.

Considering income and spending habits, develop a budget that both partners can agree to maintain. Making sweeping changes tends to fall flat, so work toward a budget that doesn’t enforce too many significant changes at once.

5. Discuss savings and investments.

As part of creating a budget, decide how much income will go toward savings and investments. The amount a couple chooses to put towards these areas is likely determined by their goals from step one.

6. Make sure proper insurance is in place. 

Financial protection means more than just the money couples are saving. It’s also critical for partners to look at insuring their most important income source, themselves! For those that don’t already have one in place, a term life insurance policy can be an inexpensive option that can financially support a partner if one person pass away unexpectedly.

7. Schedule a recurring financial meeting.

Creating a financial plan is a great start. But as life evolves, so too will the plan. That means couples will need to set recurring meetings to discuss progress and where they’re heading next. Some couples find monthly meetings to work well, while others are content to re-assess goals annually. Find out what works best, and be sure to stick to the schedule.

The bottom line

Building a stable joint financial plan is critical to financial success as a couple. And the most important elements are open communication, honesty, and transparency. As long as both partners agree to work toward shared financial goals, the right plan can ensure they’ll hit their goals quicker and get financially stronger together.

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