Navigating finances as a couple can be tricky, but open communication and setting boundaries are keys to making it work.
Disagreements over money can drive couples apart and is one of the main reasons why married couples end up divorcing. This is why it is important to talk through your finances early in the relationship, and make sure both of you are aligned on the same page before it is too late.
Like most couples, my husband and I have completely different approaches when it comes to handling money – a large part of this stems from our backgrounds and how we were raised.
He never had to worry about money while growing up, and was given almost everything he wanted or needed. My family, on the other hand, struggled badly during the Asian Financial Crisis and had to always watch our budget, or we’d end up not having enough. On numerous occasions, we had to borrow from relatives in order to pay for our daily needs. Whenever I wanted anything – a book or a new school bag – I had to work hard and save enough money before I could afford to purchase it. Which explains why I’m always more cautious when it comes to spending, whereas my husband is more willing to splurge. I save up for a rainy day (and our future retirement), whereas he didn’t have a habit of saving until he met me.
But here’s how we make it work for us anyway.
I’m not the sort to live off a man (much less a boyfriend), so even during our dating years, we mostly went dutch (unless it was a birthday treat).
While planning our wedding, we split the cost of the wedding banquet evenly as well. Thankfully, we were able to pull off the fairytale wedding of our dreams at under $100 per guest, which meant that we didn’t have to skimp too much during our honeymoon in Italy.
Why not let the man foot the bill? Well, I didn’t want to start our marriage on an uneven note, so we decided that sharing the cost in equal proportions (except for our own expenses e.g. bridal gown, makeup, etc) would be the best way forward.
Most couples will think about setting up a joint account after they get married. If you want to avoid having to track, then the simplest way would be for both parties to contribute monthly to the joint account and use it to pay all your joint expenses:
- Housing mortgage
- Utilities (electricity, water)
- Internet and telco (if you have a home line)
- Children-related expenses
Of course, the above is not an exhaustive list.
Whether you contribute in equal ratios depends on the dynamics of your relationship: if one party earns a higher income, then you can decide whether that necessarily means he/she should be bearing a larger financial responsibility in your family as well.
In our case, we set up a joint account, but the main purpose was to maximise the higher interest that we can get with DBS Multiplier (read about our hack here), rather than using it to pay for our household expenses.
Instead, we adopt a different approach that works for each of our personalities: I manage all the time-sensitive bills, while he handles everything in relation to the car. This arrangement came about because he tends to procrastinate and miss payment deadlines, but I won’t necessarily recommend it for other couples because it means one party will be carrying the heavier burden.
This means that about 80% of the bills are handled by me, especially the ones that come with potentially severe consequences if we do not pay on time i.e. mortgage, our helper’s salary, children’s school fees, insurance premiums. These also include the premiums for our parents’ insurance policies, which we cannot afford to let it lapse. Then, at the end of each year, I tabulate the total expenses across these four categories and send it to my husband, who then pays me for his half of it.
On his end, he handles and pays for everything that comes with the car (since he uses it for his business, and I can’t drive anyway).
Investing for our retirement
My husband doesn’t know how to invest, so this falls under me as well. However, out of respect, I continue to run my investment thesis by him before I buy anything using his funds. The same goes for anything I invest for the children’s portfolios.
At this moment, I manage it by using good-old Excel to track what’s mine versus what’s his and the kids, but that comes with its own administrative headache, of course.
If you and your spouse both know how to invest, it might be better to manage your investments separately in your own account(s) so that you do not need to track. That way, you’ll also be able to make your own investing decisions and avoid the stress that comes with managing shared funds (especially if an investment goes awry).
As you can see, there’s no right way on how to manage finances as a couple. Ultimately, the best way is the one that works for your personalities, so you will have to sit down with your partner to figure out which arrangement works best for both of you.
The good news is, the sooner you do this, the less likely your marriage will end up in divorce over money issues in the future. That way, you’ll both be able to walk together towards your happily-ever-after.
If you’re thinking about getting a joint savings account, be sure to do your due diligence and check out the best ones for you.
Read these next:
Money Confessions: Are Joint Savings Accounts Relationship Wreckers Or Boosters?
How To Convince Your Partner That Investing Is Important
Investing As A Couple? Follow These 7 Essential Tips For Success
6 Money Strategies That Will Boost Any Romantic Relationship
4 Signs You and Your Partner are a Bad Money Match