Guest Author
Written by Lauren Sutton | When it comes to savings, it can be tricky to understand whether you will be better off saving alone or with a partner. It can also be difficult to know how much you should or could save and how to go about saving it as well. So what are the hard facts of saving alone over doing it with a partner and vice versa? Read on to find out…
Go it alone
Obviously, if you are single, saving and investing for the long-term alone is a given. While you may not have someone to contribute to the pot, your personal monthly outgoings are likely to be less than if you live with someone. When you’re with a partner, any debts either of you has will need to be taken into account when working out how much you can save each month. It may be the case that one of you is able to save more than the other, giving an unbalanced share of the total. This situation isn’t something you have to worry about when saving alone and you know that all the money you save is for you. It also means that you don’t have to ask permission or come to any compromises with regards to where and how you invest your cash; the decision is all yours.
On the other hand, if you have found yourself single due to divorce, you may find the cost of living rises, meaning you actually need more savings – this is important when looking at developing a Family or Personal Income Plan. Living with someone is cheaper for each of you than living alone because all of the costs are divided and this is no longer applicable once you separate. Once you add in the cost of legal fees and anything that has to be divided in the divorce settlement, you may find that you have to save harder to get back to the position you were in when you were part of a couple.
Couple up for benefits
If you are part of a couple, the savings process can be a lot easier. Almost everything you have is likely to be a joint asset, often making everyday living much cheaper. Your expenses and bills are shared when you live with someone, meaning the amount you each contribute may be lower than if you were paying for things on your own. This can often leave you with more spare cash at the end of the month that can be put into a joint savings account. Of course, you also have two salaries coming in each month, meaning you will have more money together anyway. Sharing everything can make for lots of little savings along the way, which can turn into big sums later on in life.
The flip side of this is if one of you falls ill. If it gets to the point where you have to give up work either due to illness or to care for a sick spouse, the salary reduces, but the outgoings don’t tend to drop accordingly. If you or your partner has to go to a nursing home, there are more fees that need to be accounted for, all eating into your joint savings. This can drop the amount you have very quickly so in some ways, you need to over-save if you’re part of a couple as much as you do if you’re single.
About the author:
Happily coupled Lauren Sutton is a UK-based journalist who contributes this article on behalf of Cambridge Building Society.