Building a financial sound future as a couple
So, you have finally taken the plunge and said I do! Congratulations, you have just made one of the most important decisions you will ever make in your life. Being married can be a most fulfilling and wonderful experience.
However, when husband and wife do not have the same values when it comes to finances, it can become a recipe for disaster. So, one of the keys to a happy marriage is to make sure you are both on the same page when it comes to managing your hard-earned money.
Standard Bank’s Maerua Mall Branch Manager Maureen Louw says “Spending is easy to do together, but saving as a couple can prove to be a challenge. Saving should be a couple’s top priority, and with your savings will come the ability to invest for your future as a family. The bank is not just there to give or take in money, but also there to encourage savings and investments”.
For many people, saving and investing is one and the same thing and the terminology is often used interchangeably. The experts, however, will tell you that saving and investing can be considered to be two entirely different disciplines but have equal importance in terms of crafting a financial plan and securing your future financial freedom.
“Saving is seen as a secure way of accumulating money by making regular contributions into a savings product. Investing on the other hand, is more about protecting and growing a pot of accumulated money. It is with this in mind that we encourage savings and more especially saving for the future. At the end of the day it is all about maintaining an ongoing relationship with our customers,” says Louw.
For entry level savings, banking accounts are normally the product of choice given their accessibility, convenience and ease of use and understanding. Furthermore, they provide security to your saved funds. As savings needs progress, products such as endowment policies, education policies, unit trusts and retirement annuities are also considered.
“However, whether you are saving or investing, it is vital that you understand that different products should be used for different objectives and in order to achieve this you need to understand the nature of the products available,” adds Louw.
Now that we have explained a bit about saving and investing, here are some tips on how to get started on your savings if you have not already done so.
Get the budgeting basics right. Before you can start saving, you need to know what your total income and total expenses are as couple. A basic budget will give you a bird’s eye view of your financial situation. Once you know what your monthly obligations are, you will know how much you can afford to put aside.
What are you saving towards? Newlywed couples can be forgiven for thinking they can suddenly take over the world together. They will want to go on exotic holidays, buy expensive furniture, and spend on the latest make of car, often making unnecessary debt in the process. But then they’ll realise that accumulating assets takes time. So they will need to prioritise. It’s good and well to want to go on holiday every year, but you need to decide which is more important - an annual holiday or a fully furnished house? Luckily, couples nowadays tend to live together before getting married so you might be lucky enough to already have a fully furnished home if you are one of those couples.
Think about the future. When saving, you need to know whether the money will be used for that holiday or whether you are thinking longer term. For example, if you plan to have children, you will need to save towards their upkeep and their education.
These are just a few tips to get you started. The best thing you can do is to speak to a Standard Bank financial planner. They will give you all the advice you need to ensure you have a healthy, financially secure marriage.