Valentine’s Day 2024: Essential investment guide for couples

Money can’t buy you love, but it is definitely going to make life better for your loved ones. No matter how much you care, love or support your partner, not having the financial means to do so, or just the lack of understanding of your partner’s financial needs and goals, can be frustrating for a couple and cause stress in relationships.

Maybe that’s why, this Valentine’s Day, it may not be a bad idea to discuss money with your most special person so that you both are in sync in the journey of life.

How exactly should a couple handle the financial aspect of their lives to work as an efficient team could be tricky. Here are some suggestions on the areas you can focus on and build a secure future together as a family:

1) Understanding your partner’s aspirations and goals

Your first responsibility as a partner is to understand what your other half aspires for in life. Only a couple who is aware of each other’s financial goals can actively work together towards achieving them.

Discuss about your present financial situation, personal financial planning, monthly expenses and future aspirations with your partner. Have an honest discussion on incomes, debts and budgeting. Set clear financial goals – dream vacation, car, house, or retirement -- and only then you can implement effective saving strategies. This would create a sense of partnership and you would see more consensus than conflict in managing finances.

2) Joint bank accounts

Reports show that spending habits and budgeting are the money topics that are most likely to lead to disagreements in relationships. In today’s time, when usually both partners are working, dividing responsibilities and financial load can be a tricky matter.

Couples who want to pitch in equally to maintain a lifestyle can open a joint bank account to pool their incomes and use the collective fund to cover shared expenses. You can also use the joint account to set a monthly spending limit as a couple and maintain financial discipline. However, maintain your individual separate accounts as well to protect your financial independence to some degree.

3) Creating emergency funds

Couples should always save for an emergency fund to handle unforeseen circumstances, like a job loss, significant medical expenses or home or auto repair bills. An emergency fund should ideally contain about three to six months’ worth of living expenses, according to experts.

To create an emergency fund, you can either open a dedicated savings bank account or invest in an instrument that is highly liquid, like a recurring fixed deposit, or a mutual fund SIP (systematic investment plan). Just make sure that the money in your emergency fund is growing with time without being locked in an investment instrument.

4) Joint home loan

Buying a house of their own is almost every couple’s dream. But only a few know that applying for a joint home loan can help you fulfil this dream much faster while also saving money on income tax. Women applicants in home loans can enjoy discounted home loan rates, which significantly reduces EMI (equated monthly instalments) burden on the family. Besides that, opting for a joint home loan can lead to a reduction in stamp duty as many state governments offer a lower stamp duty rate for women property purchasers.

On top of it, there are many taxation benefits of joint home loans as well. The Section 80C of the Income Tax Act, 1961, enables a tax deduction of up to ₹1.5 lakh on the principal amount of the home loan. Additionally, Section 24 allows borrowers to claim a tax deduction to a maximum of ₹2 lakh on the interest repayment towards home loan. As a couple, on taking a joint home loan, you can claim a total deduction of ₹3 lakh under Section 80C and ₹4 lakh under Section 24, thereby reducing your tax outgo as a family.

5) Buying term insurance

Last but not the least, buying term insurance is the most important thing you need to do to secure your partner’s future in your absence. You can either buy an individual term insurance policy, or purchase a joint term insurance plan that provides both spouses protection under a single policy. Also, make sure that you don’t wait for too long before buying insurance. Getting these policies early in life helps in maintaining lower annual premium amounts.

To sum up

Preparing a financial roadmap together can be helpful in securing your future as a couple. On the occasion of Valentine’s Day nothing could be a better step forward than ensuring a hassle free life for you and your family with prudent financial planning. Growing wealth to keep your financial worries away will also give you mental peace helping to build a strong bonding with your partner. With proper planning and early investment you can take the first step as a couple in your journey to grow wealth.