When a couple decides to live together a lot of difficult decisions often present themselves, not least of which is whether sharing a home should extend to combining incomes.

And, if they keep their money separately, there are the questions of who should pay for what and what ought to be their approach to investing - together or separately?

Whatever route such a couple takes in managing their money, says Kadia Rosewell-Taylor, a client relations officer with Barita Investments' Montego Bay office, it is important to start with good communication and firm discipline.

"Proper financial planning is critical in every relationship," says Rosewell-Taylor. "Partners must take the correct approach to handling debt, merging finances, keeping spending in check, investing wisely and preparing for financial emergencies."

She offers a primer for cohabiting couples, which is just as useful for those who are formally married.

Couples should communicate

Couples, she advises, should, from early on in the relationship, discuss fully each other's view on handling money and and be open about debts that either partner may have.

"If opinions differ, work assiduously on a compromise," she suggests.

Couples, she says, should opt to keep separate accounts for personal needs and a joint account for household expenses.

Couples should set goals

According to Rosewell-Taylor, outlining what they want to achieve and formulating strategies to get them may not only be good for the relationship but is sound economics.

"Whether it's saving for a vacation, a home, education or retirement, goal-setting allows couples to be in sync financially and it reduces conflict," she says.

Couples should create budgets

It is not uncommon for couples, especially younger ones, to believe that they do not have enough money to save and invest.

"An evaluation of their earnings and expenses may pinpoint areas for cost cutting and saving," Rosewell Taylor says. "Creating a budget is quite simple."

Here goes:

List ALL expenses for the month, intended amount for saving.

Deduct the projected expenditure from the combined net income.

If expenses exceed income, reduce expenses by eliminating unnecessary expenditure and/or finding ways to cut back on spending. For example, the couple may decide to car pool or shop at wholesale.

Couples should be clear about their investment options

"Investment options for couples - as for every one else - vary in risk and return," explains Rosewell-Taylor.

That is why, she says, they should be clear about who they want to invest with.

"The type of investment that is best suited for you is based on your age, your goals and your appetite for risk," she says. "Historically, stocks have provided a higher than average return, however, they are considered to be risky. Government bonds, on the other hand, are considered to be the least risky investment type but yield a lower return."

clear vision

But before arriving at such specifics, couples should have a clear vision of what they want to achieve.

"Every good financial plan begins with a vision of an ideal lifestyle,"stresses Rosewell-Taylor. " A vision clarifies your values and how much money you will need to live the life you desire."

In that regard, a couple should evaluate their current financial status then start to think about fashioning a portfolio of different instruments with varying tenures and levels of risk.

Here are some that Rosewell-Taylor says couples might consider.

Government paper (e.g., repos). These give guaranteed rates of return and can be used as collateral for loans at attractive rates. They are also offered in US and euro dollars, allowing investors to hedge against the devaluation of the dollar.

Equity or stocks. Trading in equities allows the investor to gain wealth through dividend payment and price appreciation.

Mutual or unitised funds. These are available for persons who are unable or unwilling to monitor the stock and repo markets, and prefer to take advantage of professional management and market diversification.

Email Kadia Rosewell Taylor at K.Taylor@barita.com