Money and financial goals are still sometimes viewed as taboo subjects, even within relationships. If you’ve been putting off conversations about finances, creating a plan together could have many benefits.
Talk Money Week takes place between 7 and 11 November, so it’s the perfect time to think about who you discuss your finances with, and how you approach the topic.
Actively talking about money can be positive for both you and your loved ones, and research suggests it’s something younger generations are more likely to do. According to Royal London, 3 in 4 18- to 24-year-olds spoke to their parents about money matters when they were growing up. In contrast, this falls to 43% for those over 65.
If money wasn’t openly discussed during your childhood, it can be hard to change your mindset around the topic. Yet, when you’re planning a future with your partner, your finances will play a critical role. So, if you currently keep your financial planning separate, working together could be useful.
That doesn’t mean you have to share everything or combine finances completely if it’s not right for you. Instead, you could set out how you want to work together with a financial planner.
Bearing all this in mind, here are five reasons you should create a financial plan with your partner.
1. Understand what you both want to achieve
While you may have talked about your goals in your relationship, setting out a financial plan provides a good opportunity to talk about your priorities and understand if you’re on the same page as your partner.
This may include when you’d like to retire, and what your lifestyle will look like when you give up work. Or it could be how you’ll support your wider family or bucket list destinations you want to visit.
Making these goals a clear part of your financial plan means you’re far more likely to achieve them. Without a plan, it can be all too easy for aspirations to fall to the wayside.
2. Discuss your attitudes to financial decisions
When dealing with finances, it’s important that you’re comfortable with the decisions you make. This applies to both you and your partner if you’re working towards shared goals.
For example, how does your partner feel about taking investment risk? Or what is their attitude to using credit? Talking about these issues can help you create a financial plan that you’re both comfortable with.
3. It could improve your wellbeing
Money is often linked to stress, and it can affect your overall wellbeing too.
Research shows that financial stress can increase later in life. This is understandable as, on top of considering things like mortgage repayments and day-to-day costs, you may also be thinking about retirement or supporting other family members. According to Aviva research, more than 40% of 55- to 64-year-olds say they are “struggling financially”.
A long-term financial plan that incorporates your and your partner’s circumstances and goals can deliver peace of mind.
4. Have confidence in the future
One of the reasons that the topic of money can be stressful is that you may have questions about the future or wonder what will happen in some circumstances. For example, you might be concerned about the consequences of you or your partner losing your income, or how one of you would cope financially if the other passed away.
Financial planning helps you set out a blueprint, but it also considers how you’d cope if the unexpected happens. By doing this, you can take steps to provide security in these circumstances.
By planning together, you can have confidence in both your and your partner’s long-term financial security.
5. It could help make your money go further
Planning as a couple can make financial sense. Working together could mean you’re able to make the most of tax breaks or allowances.
Which ones are right for you will depend on your circumstances and goals but may include using the Marriage Allowance to reduce Income Tax liability, making use of both of your annual ISA allowances, or contributing to your partner’s pension. If you have any questions about which allowances could be suitable for you, please contact us.
Contact us to create a financial plan for you and your partner
We are here to help you navigate the challenges of creating a financial plan, from tax breaks to understanding your goals. If you’d like to arrange a meeting with us, please get in touch.
