Every year,?Valentine¡¯s Day is a special occasion wherein you get to express your love to your partner. From movie dates to gifts, we all have our own unique ways to celebrate this day with our loved ones.
But why not take this special day as an?opportunity to open up about each other¡¯s financial lives and make them stronger together? After all, having a strong financial life together can be helpful not only for the present but also for the future.
So this Valentine¡¯s Day, go ahead and make these 5 money moves to ensure that you both are en route to building a strong financial life together:
To begin the usually "uncomfortable" money talks, young couples should open up and have honest conversations about their financial position, goals, mindset, and future plans. Such discussions can be beneficial in terms of making better decisions and laying out a plan for achieving their financial goals without or with minimal compromises in each other's lifestyles or aspirations.? ?
Your initial talking points can include your spending habits, current savings and investments, assets and liabilities, and future goals?you both wish to achieve. Besides this, young couples should make budgeting a part of their financial plan so that their finances remain sorted and they do not end up overspending, especially on a frequent basis.
The next step towards laying the foundation of a strong financial life is the creation of an adequate emergency fund. This rainy day/ contingency fund will act as your financial cushion to tackle exigencies that adversely affect your regular inflow of income, such as sudden job loss, severe illness, or an accident.?
When creating an emergency fund, you can choose to have separate emergency funds or a joint one. The size of your emergency fund should be at least equal to six times your monthly recurring and mandatory expenses, such as rent, utility bills, insurance premiums, household expenses, child's education fees, mutual fund SIPs?(or any other?investment?contributions), etc.??
Another crucial financial decision that young couples should absolutely make is to be insured. While you both would be with each other emotionally during ups and downs, being financially there for each other is no less important.
With the costs of living and medical expenses continuing to rise with each passing year, protection through adequate?term?life insurance?and?health insurance has become an absolute necessity. If only one of you is earning, make sure he/she purchases adequate term insurance amounting to at least 10¨C15 times their annual income for their loved one's future in case of the policyholder's untimely demise.
And if you both work, make sure you both get term and health insurance for yourselves and each other.?This can turn out to be a "financial way": you both tell each other that you care for each other's finances and well being even in each other's absence or during life's ups and downs.??
Also Read:?Inclusion Of Mental Illness In Health?Insurance?Made Mandatory By?IRDAi
Young couples in their 20s or early 30s often tend to shrug off the idea of investing early, thinking that there is a lot of time left to achieve mid- to long-term goals such as a foreign vacation in the next 5 years, a child¡¯s higher education in the next 10-15 years, their own retirement corpus in the next 20¨C30 years, etc.
This is where they go wrong.
Young couples have the gift of time, and yet they fail to realise that the longer they delay, the higher their chances are of not accumulating an adequate corpus or of having to push their finances deeper to accumulate a large corpus within a short span of time. As you grow older, the financial responsibilities during later stages of life tend to be higher. That is why, the earlier you begin investing for your long-term goals, the more time you give your hard-earned money to grow over time and benefit from the power of compounding.
For investing regularly to meet your goals, you can choose mutual funds through the SIP route.?Click here?to check out its benefits.
Given that home loans act as a gateway for most couples to realise their dream of owning a home someday, most of us end up taking a home loan during our working years, right?
That is why couples should be aware of the additional tax advantages of purchasing a home together and obtaining a home loan for the same.??
In cases where both of you are earning, a joint home loan should be obtained in order to benefit from the tax benefits of principal and interest repayment separately?under Sections 80C and 24b, respectively. Both of you can separately avail of a Rs 2 lakh tax benefit for home loan interest repayment and Rs 1.5 lakh for home loan principal repayment, thereby reducing the overall tax outgo of the family as well.
And that's not all. Many lenders also offer a concession of 5 basis points (0.05%) on home loans with female borrowers as co-applicants. While this 0.05% may seem like a "small number," it can indeed help you save a significant amount in overall interest costs. So, couples should consider making the female partner a co-applicant on the home loan to reap these financial benefits.
Moreover, if you both are earning, a joint home loan can even enhance the couple¡¯s loan eligibility for a higher loan amount, if needed.
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