Before Julia and I walked down the aisle, many friends told us from their experiences that one of the toughest challenges in marriage is to agree on the ways to manage household finances.
Due to different family background and the way that our parents brought us up, we have different attitudes and habits on spending and saving. We cannot expect a couple to have the same priorities in managing finances. Compromises and mutual respect are keys to work out an agreeable pattern together.
After nearly 30 years of marriage, we must say household finance has not been a great issue for us. Why? Besides the fact that both of us share the same trait of being thrifty, we also established 2 basic principles and stick to them religiously.
1) Find your comfort level with merging your finances.
As Christians, we believe in trust and openness in our financial accounts. We have joint accounts to manage our household spending, including major spending items. One current account to take care of our routine expenses such as:
- Household maintenance
- Transport – including hire-purchase installments on cars
- Holidays and entertainment
One saving account to manage items like:
- Children’s Education fund
We apportion fixed amounts for our monthly personal expenses like clothes, books, and hobbies. This works well because we have the freedom in spending on items which are important to us every month. If we want to buy something more expensive for personal hobbies such as a bread-making machine or an iPad, we will forgo other expenses and accumulate the savings enough to get it.
However, we do believe that every couple is unique and you have to find the arrangement that suits you best.
We are both great supporters of living with minimum debts. Except the major investment and necessary items such as housing mortgage, car loan and other property loans for investment purposes, we do not take on debts for our general expenses. This would mean we pay off our credit card balances every month, which will ensure that we have enough money before we swap the card. You may enjoy the temporary thrill to spend lavishly on luxury goods, but you will experience emotional stress when you have to face the fact that these items need to be paid off. It can become a potential bomb in a couple’s relationship.
Spending is a habit. (Click here to read for your reflection) If a couple can cultivate a mutually agreed manner of spending, they will save themselves from heartaches and start enjoying their lives together.
If your partner has substantial pre-existing debts, you may want to make a formal plan or even sign a prenuptial agreement to pay them off consistently.
Review your household financial priorities regularly
Once we get married, our environment changes all the time. As a family, we will face different challenges at various stages. Before we have children, our priority may be on buying a house and a car. When the first baby arrives, we have think about setting up an education fund. When your family grows, you may need to change a bigger car to accommodate all of them. When you grow older, you will need to budget for nutrient supplements. In life, change is constant. Therefore, it is only logical that we should review our financial management and priorities regularly.
Household financial management needs not be difficult when we remember how to effectively communicate priorities, adopt “give and take” principle and live within our means.