Love is in the air as newlyweds plan their Valentine’s Day outings. Instead of buying gifts and splurging your hard-earned money on items that may be ethereal and temporary, you may as well use your money to invest in something that keeps you both afloat in the long run.
If you find this idea cliché, visualize yourself in rags and then as a financially independent couple deeply engrossed in love and passion.
Open a joint bank account to mark a joint opening in life
Marriage may seem like a surreal experience in the beginning. Why not start your financial journey with your spouse with a financial instrument like a joint bank account? If truth be told, it is the second biggest step after sharing your bed and bathroom with your better half. Initially what looks like a minor adjustment may go a long way in planning your finances together.
Once you both zeroed in on the decision to have a joint account, try to look for a bank that offers the highest interest rates. Accessibility and distance may no longer be a problem considering how you can easily operate the account using the bank’s app on your mobile phone. Before you open a joint bank account together, discuss the following
- How much money both of you would contribute towards the fund every month
- The purpose for which the bank account would be used
- Decide the kind of expenses and investments that would be made using the money in this account
- Include your account while deciding your budget for the year.
Viral Bhatt, Founder, Money Mantra says, “When it comes to budgeting, discussing a household budget and determining who will be responsible for managing the account is important. Both partners should be on the same page regarding spending habits and priorities.
Apart, discuss which expenses will be covered by the joint account, such as rent, utilities, groceries, and other household bills.
When it comes to access and control, agree on who will have access to the joint account and how much control each partner will have over the account. It's important to clearly understand how decisions will be made and how the account will be managed.”
It may seem a bit arduous at first, but this is the first step that all newly married couples must take without being too anxious about its effect. However, its use and continuity depend a lot on an individual understanding of finances.
Show love to your partner with gold
A special bond mandates a special gift. Buying gold rings and jewellery is now passé, especially, with the government limiting the amount of physical gold you can have. Instead, nudge your partner to invest in gold. Better if you gift your partner a gold mutual fund or buy a gold ETF in his or her name. Pay for the first instalment post which your spouse can invest in the same regularly. A systematic investment plan (SIP) made into these investments for a decade or more can yield you both returns that you may fall back on during the golden years of your life.
Dev Ashish, Founder, Stable Investor says, “If your wife really loves wearing gold jewellery, then it’s fine to give gold ornaments among other things as a gift this Valentine’s Day. But if not, then a better way to have exposure to gold is via gold ETFs and Sovereign Gold Bonds (SGBs). Maybe if you gift a gold ETF to your wife aka valentine, later on, it can be used to scale up the investment in gold via a combination of SGBs and ETFs gradually. This will provide a good balance of liquidity (via ETFs) and higher returns and better taxation (via SGBs) for the gold allocation in her portfolio.”
Show your love the traditional way
This year’s budget has focused on economically empowering women by announcing the “Mahila Samman Savings Certificate scheme” which allows an investment of up to ₹2 lakh for two years at 7.5 per cent interest. Assuming that you have a budget of ₹50,000 to gift your wife
|Amount of deposit||Returns percentage||Investment tenure||Total value of the corpus|
If you love to express your emotions in a traditional fashion, gifting your spouse one such certificate would also ensure an addition to her investment portfolio. Fixed deposit interest rates are rising, thus, yielding your partner enough earnings for the future.
Gift your partner a mutual fund investment
Odd as it may seem, a couple that secures finances jointly grows together. This explains why you may gift your partner a SIP plan, wherein the couple may jointly park their money for the next 15-20 years, thus, earning you enviable returns in the long run.
A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC says, “A mutual fund unit as a gift helps in multiplying the value of the relationship, both from emotional connect and real money effect. It increases in value over a period of time, cementing the relationship and making it memorable.”
Putting money in an index fund helps, though you may start with a simple blue-chip fund. CA Kanan Bahl, a financial educator and growth consultant says, “Equities are an appreciating asset class and are one of the best gifts you can share with your valentine for a ‘long-term’ partnership. Mutual funds SIPs are an easy way to invest in the equities market and thus, rather than complex direct stock investing, SIP is a better way of gifting equity investments. For the layman, Nifty 50 Index Funds are good to start with however, there can be better actively managed funds which you can choose based on goals and risk appetite. Do consult a SEBI Registered Investment Advisor before making a decision.”
However, you may also opt to buy a flexi-cap fund for your partner to allow more scope for myriad kinds of stocks of varying market capitalization. If your spouse loves taking risks, a small-cap fund investment will be worth the wait.
The following table suggests a simple monthly SIP of ₹10,000 can help a couple achieve a part of their financial goals in 10-20 years.
|Name of the fund|
The total value of the corpus
|HDFC Index Fund - S&P BSE Sensex Plan||13.15||12,00,000||12,89,221||24,89,221|
|Tata S&P BSE Sensex Index Fund||12.76||12,00,000||12,31,443||24,31,443|
|Canara Robeco Bluechip Equity Fund||14.80||12,00,000||15,52,473||27,52,473|
|Nippon India Large Cap Fund||15.43||12,00,000||16,61,587||28,61,587|
|JM Flexi Cap Fund||16.56||12,00,000||18,70,301||30,70,301|
|Franklin India Flexi Cap Fund||15.76||12,00,000||17,20,770||29,20,770|
|DSP Small Cap Fund||21.99||12,00,000||31,55,763||43,55,763|
|Kotak Small Cap Fund||20.54||12,00,000||27,60,309||39,60,309|
Love is not just an emotion; it is a responsibility too. Therein comes the responsibility too of making your partner financially secure for the future.