Love is in the air , it’s the love month!

One important aspect for a relationship to work is to have a healthy financial relationship.  This aspect should not be skipped and should be discussed between spouses as a lot of couples fight over money and this can become a reason for separation.  Here are some financial advise for couples.

  1.  Identify which one of you manages money best.

When both husband and wife are bringing earnings home, they should both have a say on how money is managed.  However,  I suggest to give more financial responsibility to the one who knows how to budget, knows how to identify needs and wants, and is not an impulse buyer.

  1. Apply the 60-20-20 rule

Have you heard of this rule?

60 means allocate only up to 60% of your income for your daily expenses.  It is important to list down all your expenses and have a budget for your daily needs.

20 means 20% of income to be allocated to savings, but if you can do more than that, go ahead.

And the other 20 means 20% of your income is allocated for your hobbies and wants.  Yes, you should prepare money for that too so you and your spouse will be able to enjoy life, but limit to 20% only unless you have another source of income.

  1. Have a combination of joint accounts and separate accounts depending on the purpose of the funds.

Have you heard of the envelope system of saving?  Instead of using envelopes, I suggest to open different bank accounts or different accounts under various financial instruments for each purpose of the fund.  Whenever your receive income, just distribute them into these accounts.

Examples:

  1. Open a joint account for emergency funds and for daily expenses.
  2. Open an joint account for educational funds.
  3. Open a personal account for your own wants or for your family’s wants (i.e. travel).
  4. Open a retirement fund account
  5. Open a medical fund account

It is best to identify the purpose of each account so that it will not be used in times that you want to splurge.  For long term purpose it could be invested in long term instruments like bonds, UITF funds, mutual funds, stocks, and life insurance plans.

  1. Be transparent and be accountable to each other

One way to make your relationship stronger is that there should be no secrets especially with money.  It is best to let each other know when you receive surprise bonuses/unexpected profits, income opportunities, or even debt.

This way, you can decide together on where should the excess money be allocated or help each other if someone got into debt.

[bctt tweet=”If a spouse would want to splurge and buy a luxury item, don’t be shy to let your spouse know how you feel and reassure your partner that you will support each other.  Here we can express our love for each other.” via=”no”]

  1. Insure oneself to express your love

The greatest love letter that you can ever give to your spouse is a life insurance policy.  Why?  Because you provide liquidity to your spouse in the event of unexpected circumstances.  As you insure yourself, your spouse and your children will feel your love forever because you are still providing funds for their needs and for their wants even if you are no longer around.  This is another way of creating a legacy of love for your family.

If you need financial advise as a couple, send us an email.

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