How to manage money as a couple

Anil RegoRight HorizonsMarriage means that two people living together have to deal with issues such as joint finances. Typically in every household one spouse takes care of the finances, it can be the husband or the wife, but there seems to be an unwritten law that only one spouse needs to take care of the family finances. However, one should ideally plan the family finances keeping one's spouse in mind and also in the loop, since all major financial decisions should be taken with the spouse weighing in on important matters.There are pros and cons to managing money as a couple, but more often than not the pros outweigh the cons. For example, both of you might earn, meaning the corpus is much larger than it could be otherwise, but also keep in mind that the expenses are also more. Let us look at a few ideas that can make financial planning as a couple a little easier. One should know all income sources and if you are both earning, then it would be advisable for you to talk about your income levels and expense patterns to each other. If you happen to have only one source of income, that is if your partner is not employed, then it is advisable to be stringent with expenses early on, as otherwise saving a meaningful corpus will become harder. One should also discuss financial goals with one's spouse, as this will help in setting up common goals and help in asset allocation. It is also a very good idea to keep your spouse appraised about the family finances, even if they do not understand finances well, and one of the best ways to do this is to maintain proper files of all the finances. For example, you can have one file for all the bank documents, which include the bank statements, cheque books, debit & credit card information, etc.; one file for investments in various instruments, and so on.A budget is a very important aspect of your financial planning, and if you stick on to your budget each month, you will be surprised at the benefits – it is more than likely that you will end up with more money in the bank each month that you thought was possible. The budget should take into account the spending pattern for both you and your spouse. It should also breakup the expenses into essential items and luxury items/ wants – this will make it easier to cut down on unnecessary spending. Choosing an investment option is an important factor in planning your finance, your money can reap benefit of compounding only through proper investments. Try to choose investment options with respect to your goals, for example, if your goal is to go abroad for a holiday in the next few years, it is advisable for you to invest money in a Public Provident Fund (PPF) as it gives tax free fixed interest rate, principal security and income tax deduction and your capital is not at risk.  When looking at equity options, one should opt for the Systematic Investment Plan (SIP) route, as one gets benefits from both an up market as well as a down market. Investors investing through SIP's tend to purchase more units when the market falls and fewer units when the market rises, therefore the average cost per unit declines over a period of time thus being an effective tool of risk management. It is also advisable to save more money in contingent/emergency fund. This money should be used only in the case of emergency, for example say you lost your job and have to pay your EMI's for loans etc, you can use contingent fund money to pay them off until you get placed in a new job. It is very important to note that this money should be maintained as a separate account, apart from your usual savings and investments accounts. It is important to get the right insurance policies in place, such as life, medical, auto, etc. to ensure that one's family is taken care of in the case of any eventuality and also that in the case of auto insurance there is no major financial burden in the event of an accident. Keep in mind that communicating with your partner is key in all this, and it is always advisable to keep them posted on any new investments being done, or loan being taken. Summary:• Remember more than "it's mine" factor, "it's our" factor should be followed!• Set your financial goals as a couple• Chart out all sources of income and heads of expense• Keep a file with all the important papers and information