Managing the family finances is one of the most important components of married life. Unfortunately, it can also create conflict. The secret is to have a talk and establish ground rules on how to manage your finances to provide structure for your financial goals. Here are ways to ensure that your financial life will be smooth sailing.
- 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.
- Prioritize basic needs.
When budgeting, see to it that you set aside enough money for necessities—food, medicine, school expenses, monthly bills, etc. Luxe items should be the last thing on the list to avoid unnecessary expenses.
- 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 your financial wellbeing. FWD Life Insurance’s Manifest combines life insurance with investment, which means your future is not only protected should anything happen to you, you can also potentially grow your money through investment. FWD KanMend Critical Illness Insurance is another way to protect yourself from health emergencies. Available on FWD’s online shop, it gives you support for medical treatments when diagnosed with any of the 42 covered critical illnesses.
- 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. Better yet, put a portion of it in a time deposit to ensure that your financial wellbeing is covered for the future.
- Open a joint savings account.
Married couples should open a joint savings account so they both have access to the money in case of an 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 The former can be withdrawn by either one; the latter needs both signatures for withdrawal.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 insurance with investment component like FWD Set for Life, which gives you cover while growing your money. Sit down with a financial expert to know more about it.
- Create a luxe fund.
You need a flat-screen TV, you want to travel as a couple? Plan for it. Create a luxe fund and put in a portion of your money in there. Only buy the items you want when you already have enough money—not before. This will teach both of you to plan and control your spending.