Managing the family money is one of the most important components of married life. Unfortunately, it’s also the most stressful. Don’t let money come between you and your partner. The secret is to have a talk and establish ground rules on how to manage your finances. This will set the pace and provide the structure.
Here are ways you can manage your money as a couple and ensure that your financial life while married will be smooth-sailing.
1. Establish a budget.
Do not spend more than what you earn as a couple. Live within your means. Set up a budget and put in it everything you need to spend for, including an emergency fund and a luxe fund. Stick to the budget. If you need to buy anything, plan ahead and allot money for it.
2. Prioritize basic needs.
When budgeting, see to it that you set aside enough money for the necessities—food, medicine, school expenses, monthly bills, etc. Luxe items should be the last thing in the list. Avoid unnecessary expenses.
3. Save for unforeseen events.
Sometimes, the unexpected happens—a health emergency, a roof that needs repair, etc. Make sure that you are covered for this by allotting a portion of the budget for emergency fund, which is usually 10% of your gross income. Don’t forget to purchase insurance plans that will protect you from future needs. FWD, for instance, has a product that combines insurance with investment . This means you’re not just financially protected, you can also potentially grow your money thru funds.
4. Keep your money in the bank.
Instead of keeping your money at home or worse, spending it, go open a bank account. It is safer and it lessens the temptation to spend it since the money is out of reach. Besides, you can definitely use the money you will earn from the interest.
5. Open a joint savings account.
Married couples should open a join savings account so they will both have access to the money in case of emergency. Some couples open two accounts, one with the emergency savings and the other with their family savings. Why two? The former can be withdrawn by either one. The latter needs both signatures for withdrawal.
6 Invest a portion of your income.
Aside from building an emergency fund and saving in a bank, explore other investment options that will make your money grow more. Opt for stocks, mutual funds, or VUL insurance, which is an insurance with an investment component.