Tips for building a solid financial foundation as a couple

Sharing financial goals and attitudes can be one of the most important parts of building a solid long-term relationship. While it might not be romantic, if a couple can agree on financial goals, they should be able to reduce potential areas of conflict and may even be able to invest more, which might mean being able to take advantage of more opportunities such as travelling overseas, or even retiring early. In the spirit of Valentine’s Day this year, why not check in with your significant other? While it’s important to have your own investments for your future, joining forces with your partner can double your chances of reaching your shared goals. Here are some key financial questions for you to get the money conversation going.

What does each person bring to the partnership financially?
First, both of you should have a good idea as to what you bring to the table: assets, investments, debt, etc. Then start working on a joint monthly budget, which will quickly put your financial status as a couple into clear perspective. From there, it should be fairly easy to map out a way forward to achieving both individual and shared goals within your means.

How do we feel about risk?
As we all bring our own fears and insecurities into a partnership, you may have different attitudes toward investment risk. Perhaps your parents lost a lot of money on risky investments, which has made you very cautious. Or maybe your partner has been inspired by a relative who took big risks that paid off. It’s best to work with a financial adviser, who can help you make investment decisions based on facts, not on emotion. A diversified portfolio may be the answer to keep you and your partner calm and focused - a happy outcome of aligning your risk appetites.

Do we know when we might like to (and will be able to) retire?
Is your dream to spend your fifties on a farm? Or are you building a business that will keep you busy deep into your golden years? As a couple, you’ll need to determine a joint retirement plan if these are shared goals. Start by deciding on your ideal age for retirement, which will help you determine how aggressively you need to invest to achieve this goal. Keep in mind that life will throw surprises your way and you will likely have to adjust your investment portfolio numerous times in your journey together. But keeping your long-term goals firmly in view, means that you are more likely to get there.

What about the short- to medium-term?
While planning for the future, it’s important to keep the present in mind. Long-term goals are essential, but what are your immediate needs and wants? Do you want to save for an amazing trip overseas, or perhaps towards a wedding for your child, or to buy a holiday home? By pooling your resources into a portfolio of unit trusts you will be able to make your money work harder and reach those goals sooner than you may think. Plus, unit trusts give you flexibility in that you can access them if you need to. Some investments, like your retirement fund, have different rules around accessibility, so it’s essential to have investments for shorter- to medium-term goals as well.

M&G Investments offers a range of unit trusts that are designed to help you save towards your future together. For more information, contact your financial adviser or our Client Services Team on 0860 105 775 or at info@mandg.co.za.