Five questions to help couples with financial planning

1 Do we have enough emergency savings?

Sitting at the very base of the financial wellness pyramid is emergency savings. Often referred to as a rainy-day fund, this is usually defined as enough ready cash to cover three to six months of your household expenses. And in theory, you’ll only tap it to cover a large, unforeseen expense or in case one of you temporarily loses your job.

If, together, you already have enough cash on hand to fund an emergency savings account, great. If not, consider opening a joint checking or savings account just for this purpose and consider a few important ground rules:

• Funding the account automatically through payroll deductions
• Deciding together when an expense or temporary loss of income during an emergency is a reason to tap this account
• Replenishing the account as soon as possible
• Growing the account each year to account for inflation

2 How well are we handling credit and debt?

Any loan should be a joint decision. Even if you or your partner’s income alone is enough to cover the payments, they’ll likely affect your household cash flow. And for a mortgage or other large, joint purchases, you’ll both need to agree.

This said, it’s also really important for both partners to have solid credit of their own. As long as you can keep on budget and use them responsibly, it’s probably OK to have and use separate credit cards. This is especially true if you’re the type of people who can pay off your balances each month.

3 Should we have joint savings and checking accounts—or accounts of our own?

There are several good arguments to be made for a joint checking or savings account. For instance, it provides a unified view of how much money the two of you are bringing in and spending. Depending on the particulars of the account, it could also reduce the total fees your household is paying. And—although this is more of a future consideration—a joint account helps keep the money available to the surviving partner if one of you passes away.

With separate accounts, each partner gets full authority over the money you bring in, take out, or had accumulated before you became a couple. In other words, they can help each of you maintain a measure of financial independence. Separate accounts might also make it easier for each of you to maintain a strong personal credit history.

To achieve the best of both approaches, many couples choose a hybrid approach—a joint account for household expenses and goals, with personal accounts on the side.

4 Are we both measuring progress the same way?

While long-term pursuits, such as retirement planning, are important, it’s also crucial for couples to be on the same page with today’s finances. One way to help achieve this is to consider setting specific ongoing targets and check in on them a few times a year.

Together, these four simple ratios may help provide a nice, clear dashboard for gauging your day-to-day financial journey. 

These hypothetical examples are for illustrative purposes only and may not be reflective of your situation.

5 Do we share a vision and a strategy for retirement?

Some aspects of retirement planning are no-brainers. If one or both of you have access to a workplace retirement plan, you should consider taking advantage of it. If your employers offer matching contributions, you can put away enough to maximize your match. It’s important to choose investments that are right for your age and attitudes about risk and reward.¹ And if you need guidance, you should take advantage of what your plans offer and, if appropriate, get input from a financial advisor.

It’s also wise for couples to plan together for a retirement you’ll really enjoy. Think about where you’d like to live, what you’d like to do, and what your health might be like. Then bring your retirement strategy to life by considering both your estimated retirement expenses and potential income sources.  

Retirement planning is a team effort—and it can be one of your more rewarding shared accomplishments.

Of course, these are just pieces of your total financial picture

Depending on your ages and family circumstances, factors such as mortgages, college funding, and estate planning may be emerging as important issues.

But remember, with open, honest communication and a willingness for each partner to do their part, handling finances really can bring a couple closer together. Sitting down and answering these questions is a good place to start.

1 There is no guarantee that any investment strategy will achieve its objectives.