Love is in the air!
In order for a relationship to work, one important aspect is to have a healthy financial relationship. This aspect shouldn’t be skipped and should be discussed between spouses as a lot of couples fight over money and this could be a reason for separation.
Here are some helpful financial advice for couples:
1. Identify which one of you manages money best.
When both husband and wife are bringing home earnings, 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.
2. 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’s important to list down all your expenses and have a budget for your daily needs.
20 means 20% of your income is to be allocated to savings, but if you can do more than that, then even better.
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 this to 20% only unless you have another source of income.
3. 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 various purposes. Whenever you receive your income, just distribute them into these accounts.
Examples:
- Open a joint account for emergency funds and for daily expenses.
- Open a joint account for educational funds.
- Open a personal account for your own wants or for your family’s wants (i.e. travel).
- Open a retirement fund account.
- Open a medical fund account.
It’s best to identify the purpose of each account so that it will not be used when you want to splurge. In the long run, it could be invested in long-term instruments like bonds, UITF funds, mutual funds, stocks, and life insurance plans.
4. 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’s best to let each other know when you receive surprise bonuses or unexpected profits, income opportunities, or even debt.
This way, you can decide together on where the excess money should be allocated or help each other if someone gets into debt.
If a spouse wants 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.
5. Insure one’s self to express your love.
The greatest love letter that you can ever give your spouse is a life insurance policy. Why? Because you provide liquidity to your partner in the event of unexpected circumstances.
As you insure yourself, your spouse and your children will feel your love forever because you’re still providing funds for their needs and for their wants even if you’re no longer around. This is another way of creating a legacy of love for your family.
About the author
Sheila Ong is a legacy architect. She helps Chinoy families plan and design their financial homes by not only creating a strong financial foundation but also peace of mind, allowing families to do what matters most, which is to have more time to spend with each other. It’s her passion to empower each Chinoy family to create a legacy of love from one generation to the next through proper wealth management. As a naturally shy person, she evolved into becoming a public speaker driven by her advocacy. She has transformed many lives, including the lives of her team of financial advisors and the lives of about 400 families who are now financially secure. Sheila also values family time as she is a full-time mom to her son.
If you want to know more, you may send her an email at sheila@legacyoflove.info. For more information, you may also check out her website, https://legacyoflove.info/ and Facebook page, https://www.facebook.com/legacyoflovewithsheila/.
