Working couples can have better financial planning and achieve their goals well ahead of single working people in a family.
This needs perfect planning, goals to be focused on, avoiding overspending, delayed gratification, discipline, and consistency in investing.
Till the day we were taking you through financial planning of single income family. So, the approach here will be much more different.
There is no shortcut to achieving financial freedom. No one can join a scheme or MLM and will become rich the next day.
The world’s biggest brands, like Apple, Microsoft, Amazon, Google, Netflix, Disney, Tesla, Hp, Intel, and KFC, took an average of 30-40 years to build its empire.
So, if someone tells you, you will be rich in the next five years by signing this scheme. That should be the last day of letting them into your world.
Benefits of Financial Planning for Couples:
In this detailed analysis of working couples. You have to understand that there are two ways of income.
In financial planning, multiple streams of income are what we focus on.
A family will be steady, and income security is high when multiple income streams exist. That is the reason we say to make 5 streams of income.
When there are two ways of income, the family will not completely depend on one’s income.
Those families can easily become rich. They can attain all their goals. At some point in their life, they can focus on their passion.
A report by forbes.com says around 50% of employees are unhappy at work. They look for another job or look for startups.
These things can be achieved very quickly only by a few financial plans made in your family.
- If the husband is working and the wife is not working. Find a job for your wife; if not, she should be a homepreneur.
- Make sure your family has two ways of income in any method.
- If the husband is whom the family depends upon. Buy term health insurance in the name of the husband.
- Have an emergency fund which should be 6-12 months of your income.
- Save 30% of the husband’s income and 100% of the wife’s income.
- Invest them wisely in fixed-income instruments, debt markets, equity mutual funds, and dividend-yielding zero-debt stocks.
- Never commit to anything ahead of your financial planning. In every decision, both of you should take in the same mindset.
- Don’t be a spendaholic.
- Don’t buy anything by loan or EMI. Plan well in advance, make a goal and try to achieve it.
- If these kinds of saving patterns are employed in a house. You don’t need 30-40 years; 20 years will make you a financially free family.
Financial Planning For Couples Calculation:
Remember again, the family’s goal is to shift its current position to the next by having zero debt. Like moving from Poor to lower middle class to upper-middle class and then to the rich class.
This will not happen in a single day or a single year. There has to be a compounding effect involved with you.
You must be consistent and persistent with 100% discipline in attaining your goals.
Let us have a practical understanding of the family income of husband and wife.
Husband – Rs. 30,000 per month
Wife – Rs. 20,000 per month.
So, the total income is 50,000 in a month for a family.
Let us consider three scenarios to find out how our method will be great for a family to achieve financial freedom.
Scenario 1: 30% savings in husband’s income & 100% savings in wife’s income. The total saving is Rs. 29,000 per month.
Scenario 2: 30% savings in husband’s income & 30% savings in wife’s income. Total savings is Rs. 15,000 per month.
Scenario 3: 30% savings in the husband’s income only. As the wife is unemployed. So the total saving is Rs. 9000 per month.
The worst Scenario 4 is no saving in a family.
The investment amount per month is calculated. Let us assume the return on investment yields 10% per annum, and the total investment period is 20 years.
So, we have come to a point where the family under scenario 1 could make a corpus of Rs. 2.19 Cr, the family under scenario 2 could make a corpus of Rs. 1.12 Cr, and the family under scenario 3 could make a corpus of Rs. 0.68 Cr in 20 years.
Scenario 1 is nearly 4 times more than Scenario 3 and 2 times more than Scenario 2.
But think about Scenario 4, where they don’t save any amount. Living life lavishly, spending every hard-earned money to make others rich.
They will never achieve financial freedom and will lead their lives under debt, loans, and EMIs.
- Make sure that both husband and wife work together to make two ways of income.
- Save as much as you can save 30% of your husband’s and 100% of your wife’s income.
- Plan your goals well and achieve them, don’t get trapped in zero % EMI and increase your instant gratification.
- Financial freedom is yours if you are focused, disciplined, and consistent in investing.