Planning Your Financial Future Together

 

By Michelle Bester CFP®

 

Planning your financial future together with your spouse or life partner is essential for building a strong, secure foundation for your shared future. Setting joint goals can strengthen your relationship and ensure you both are aligned on your financial aspirations.

 

Here are some steps to consider:

 

1. Open Communication: Discuss your financial goals, values, and concerns openly. Understanding each other's perspectives fosters trust and cooperation. This can be done by:

• Having an honest conversation: Sit down together and discuss your individual financial goals, values, and concerns.

• Sharing aspirations: Talk about your dreams and what you hope to achieve financially, such as buying a home, traveling, or starting a family.

 

2. Set Joint Goals: Define both short-term and long-term goals by following the below SMART Goals approach:

• Specific: Clearly define what you want to achieve (e.g. save R100,000 for a down payment on a house).

• Measurable: Determine how you will track progress (e.g. saving R8,333 per month for 12 months).

• Achievable: Ensure the goal is realistic based on your combined income and expenses.

• Relevant: Make sure the goal aligns with your joint values and long-term plans.

• Time-Bound: Set a deadline for achieving the goal (e.g. within one year).

 

3. Create a Combined Budget: Track your combined income and expenses. A budget helps allocate funds towards joint goals and manage daily spending.

 

4. Build an Emergency Fund: Save for unexpected expenses together. Aim for three to six months of living expenses in a separate, easily accessible account.

 

5. Manage Debt Together: Create a plan to tackle high-interest debt, such as credit card balances or personal loans. Paying off debt can relieve financial stress.

 

6. Invest as a Team: Consider investing together to grow your wealth. Diversify your investments and seek advice from a Certified Financial Planner (CFP) for a tailored Investment Portfolio.

 

7. Plan for Retirement: Contribute to retirement accounts individually and together to qualify for the contribution tax benefits. Regular contributions can maximize your future financial security.

 

8. Review Insurance Needs: Ensure you have adequate health, life, and disability insurance. This protection can provide peace of mind in case of unforeseen events.

 

9. Estate Planning: Create or update wills and consider setting up trusts to ensure your assets are distributed according to your wishes. In South Africa, your marital regime significantly impacts your estate planning. There are three primary types of marital regimes:

• In Community of Property: This is the default regime unless stipulated otherwise by a prenuptial agreement. Both spouses share one joint estate, meaning that each spouse owns an undivided half share of all assets and liabilities from before and during the marriage.

• Out of Community of Property with Accrual: Spouses have separate estates during the marriage, but they share the growth (accrual) of their respective estates during the marriage.

• Out of Community of Property without Accrual: Each spouse maintains a separate estate, including both assets and liabilities, which they bring into or acquire during the marriage.

 

10. Regular Review and Adjust: Schedule a meeting with your Certified Financial Planner (CFP) at least once a year to review your financial progress, discuss changes, and adjust your plans as needed.

 

Ultimately, the best time to start planning your financial future is now. The important thing is to take action and work together towards your financial goals.

 

Read more about Ascor® Financial Planning Services

 

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