Pair up on your finances this Valentine’s Day

Many couples prefer to keep their finances separate, since money issues can be sensitive and one of the biggest sources of tension in an otherwise happy relationship. Yet working together on managing them could be a rewarding step in getting the most out of your investments in order to live the life you both dream of. After all, if you share a life with someone it doesn’t make sense for you not to be taking into account your partner’s goals when it comes to finances.

Share your dreams and savings

So, why not show your loved one your commitment this Valentine’s Day by including a financial check-in with them? Besides simply sharing information, this could also mean pairing up to invest towards big-ticket purchases like a car, an apartment (plus furnishings and appliances!), or even saving towards starting a family of your own. Here are some pointers to get started.

It’s probably best to start by agreeing on an amount each of you could commit towards investing every month. Once you know how much this joint amount is, it will be much easier to determine how to invest it in order to achieve your joint goals. Listen to your partner about their priorities, their investment goals, how they feel about risk, and what their thinking is when it comes to timing.  A qualified financial adviser can also be a tremendous help in combining your resources in the most effective ways possible and finding investment solutions that satisfy you both. With their experience they will probably be able to help resolve any conflicts and know the right questions to ask each of you in your search for common ground.   

Take advantage of financial advice

If you started investing before you met your loved one and you’ve built up a relationship with a financial adviser grounded in trust, there’s no reason why you can’t keep your adviser once you’ve started investing together - both of you could have different advisers. The more information you gather from different advisers, the better. If this happens, just make sure you communicate well and ensure you attend each other’s meetings with your advisers to keep up to date with your financial situation. Try to schedule at least one annual meeting for both of you with each adviser to make sure that your collective goals are aligned and being met… even if you’re taking different investment routes to get there. Just be sure to avoid duplicating adviser fees. 

Remember, all decisions related to your combined investments should be discussed. Fighting over money can escalate very quickly - so clear and regular communication is essential.

Once you agree on how much each of you will be investing every month, if you’re not using a financial adviser then you’ll need to decide on your collective investment goal and the time horizon for achieving it. You may also need to increase your savings, lengthen your timeframe or choose different investment solutions along the way. 

A middle-of-the-road option

A great ‘middle of the road’ option could be a balanced fund, which is designed to deliver returns well above inflation for a moderate amount of risk by holding a well-diversified selection of equities, bonds and cash, from both local and offshore markets. The minimum recommended investment time frame is generally five years, in order to smooth out the variability of equity returns over time. Because balanced funds typically provide a balance of assets, it might be easier to agree on, even if you and your partner have different tolerances for risk. 

So, this Valentine’s Day, pair up with your loved one and plan the best way forward for your financial future together.

Lynn Bolin is the Head of Communications at M&G Investments.