Kaylene Grant Patterson, Contributor
PATTERSON
PLANNING FOR a financial life together should not be ignored by couples. It should be approached with importance and careful consideration. A mutually accepted plan is ideal, as it will enhance financial strengths and minimise the effects of pitfalls.
BENEFITS
It is much easier for partners to realise financial goals if they set objectives together, and agree on important decisions early. Couples should develop a financial plan which considers the time period in which they want to achieve their goals and their level of risk tolerance. Planning for a family, child's education, retirement, career, social life, consolidating credit cards, and estate planning are decisions that should be addressed early.
When assets are shared, it usually brings about greater happiness and sustainability in a relationship. A recommended method to achieve shared assets is to put both pay cheques into joint accounts. The accumulated funds can allow both parties to benefit from a higher rate of return, as opposed to investing smaller portions of money separately.
It is advisable to pay close attention to the due dates on bills and loan payments so that they do not attract late fees or increased interest rates. It may be helpful to have one person take responsibility for ensuring that all bills are paid in a timely manner.
WHEN DISCLOSING/MERGING MAY NOT WORK:
A different approach should prevail in circumstances where one partner has an excessive amount of debt, is a compulsive shopper who tends to live above his/her means, is likely to have cheques bounce, or ignores credit card payments. These issues should not be ignored and professional counselling or other assistance should be sought before that partner accesses communal resources and information.
In the above circumstance, a couple can opt to have an account with common budgetary items, and contribute to this account to cover expenses. Some people opt for separating their finances, where one partner may choose to take care of the bills and the other partner the investments. Others may open a joint savings account for all the bills and other joint ventures, but choose to invest separately.
Whichever route is chosen, to help maximise returns, both partners need to diversify their portfolios by investing in various types of investment products. Given a couple's combined risk tolerance, they may take advantage of tax-free opportunities.
It is essential that in a committed relationship, a couple should share similar goals and agree on a financial plan. It is important that, based on values, both agree on the budget. Budgets facilitate wise spending and investing decisions. Once constructed, a budget will help couples implement their plan to achieve financial goals.
Kaylene Grant Patterson is a branch manager at DB&G's Montego Bay branch. For further discussion on investing and options available, contact her at info@mydbg.com, or toll free at 1-888-CALL DBG.
