Consult a financial expert, don’t rely on relationship managers

In the era of surplus income and urban lifestyle, taking care of personal finances has surely become a priority for a worry-free financial life. With several couples facing different financial challenges, it has become imperative that they consult a financial expert rather than rely on the advice of their relationship manager at the bank. Take a look at how important it is for the couples these days to share their financial burdens and goals.

With the increase in per capita and individual income, money management topics are taking centre-stage as India aims to become a $5 trillion economy. As the middle-income class in India grows rapidly, the investible surplus is also seeing an increase. With the majority of nuclear families, comprising of couples earning well, it becomes imperative that their finances are channelised –which includes steps such as goal-based analysis and current portfolio gap analysis. 

Sharing the burden

Amidst the competitive environment and daily rat-race, it’s difficult to devote time towards ensuring good money management by one family member. Let’s say both husband and wife are earning and fall in the 30% tax bracket. For tax planning, only husband or wife can’t make financial investments. To ensure efficient tax savings, both husband and wife need good tax planning. Another example could be if a couple plans to purchase a home and they decide to opt for a home loan, then the EMI burden should be shared by the couple. By sharing EMIs, not only the partner saves tax but a couple can get tax deduction through interest paid on home loan under Section 24 of the Income Tax Act.

Sharing the goals 

Apart from tax planning, a couple can also share financial goals, wherein the wife can take care of short-term financial needs such as emergency funds or goals (the ones that need to be met in the next 2-3 years) and the husband can probably focus on long-term goals such as child’s education, retirement planning, etc. This can be another form of goal sharing. It makes sense they also share the financial burden like paying off the liabilities.  

Be prepared

Good financial planning from an early age ensures that you are well prepared for big expenses in case of unfortunate events such as sudden loss of a job, accident, death, etc. For most people, however, it is often too late and comes to a situation that if they don’t take professional advice, the damage might become irreversible.  

The writer is a senior manager - investment advisory, Capital Quotient