Should couples keep their finances separate?

Financial Planning | admin | November 20, 2010 at 8:32 pm

Should married couples keep their finances separate? This is an issue that evokes mixed response as several individuals feel marital union doesn’t necessitate financial compatibility even as some feel that joint finances are necessary to achieve financial goals.

Views from Experts:

I believe in sharing every financial detail with my wife. One of the primary reasons is that my wife is a professionally qualified financial advisor.

In fact, she took charge of my savings and investments even before we got married. Moreover, she is well-versed in every pulse of the financial markets. So, I leave the big decisions to her. Consequently, she is aware of my saving and spending pattern. “We are planning to buy a house together.

That would increase our capacity to borrow and both of us could take advantage of tax benefits. It’s a huge outgo and I feel we should jointly discharge this responsibility,” Mr Naithani says.

Hence, we are building on the kitty together. However, we keep our investments separate to avoid tax complications. It would also lead to easier and hassle-free way of filing tax returns. We pool around Rs 15,000 every month to fund other expenses.

Tip: Keep your investments separate to avoid tax complications.

I am the decision maker when it comes to finances — whether it is my own or my spouse’s. I work in the financial sector and I track the markets on a daily basis since it’s my bread and butter.

Although I advise my husband on his investments, we believe in maintaining some financial freedom given that we have our responsibilities towards our respective parents. We have opened a joint account and we transfer a certain portion of our salaries every month to this account.

We use this money to meet our household expenses. In other investments, we have opted for the either-or-survival clause which makes your spouse the natural owner of your investments in the case of unexpected turn of events. “This is a better option than nomination as the latter may run into legal complications.

If one of the account holders is not alive at maturity, it becomes very hassling for the other spouse,” Ms Vanjara adds. I have my savings accounts through which I direct my investments. We don’t depend on each other financially to carry out our investments.

Tip: Opt for either-or-survivor clause rather than joint investments. Buy a term cover to provide financial back-up to your family in your absence.

Whether you want to keep your bank accounts together or separate is a matter of Couples Finance individual choice, but it’s important for every couple to strike a financial compatibility to make the marriage work.

For that, a couple should take joint investment decisions. We have separate bank accounts to manage our expenses. But we have one joint account so that my wife has access to the funds in my absence.

“It’s important as I work in a travel-intensive profession. The joint account is a convenient and a viable option,” Mr Kulshrestha says. But I meet 90% of the family expenses as my wife has just started her own business. Hence, she needs her savings to grow it further.

However, she is not very savvy with financial markets. But I keep her in the loop about my investment decisions. I maintain a contingency fund, given the uncertainty that her business has just picked up. Hence, I feel the need to save at least 20% of my salary in a liquid fund. I can liquidate the investment if required at any point of time.

Tip: Save at least 10% of your monthly salary as part of a contingency fund for emergency expenses.

Source: Economic Times