Money management is one of the most important things that a married couple needs to work on together from the very beginning. One day, during a work lunch, I casually asked my office mates, “How do you manage money for your household? Do you or your husband handle it?”
The diversity of answers that I got was most interesting! There was no single way in managing money when I interviewed the ladies. It differs from one household to another. Here’s a quick summary of the money management systems I discovered. If you’re a new wife, take time to study these and see what works for you!
Money Management Systems in a Household
His & Hers
One mom shared that since she and her husband are both working, they each contribute their own share of expenses to their household. “He pays for the big expenses like rent, car mortgage, tuition and the salaries of our helpers. I pay for our monthly groceries and other variable expenses.” This kind of system works well if it is clear how the husband and wife divide the share of the expenses among themselves. Otherwise, concerns about who pays more may arise.
We’re a Team
“My husband and I are a team in all matters. We don’t have individual accounts. All our income goes to our joint account and we manage our money together from there.” This mom shared that she and her husband co-manage their money. They have a monthly budget plan and do their best to stick to it. If anyone of them wants to splurge on a personal item, he or she may get it from their monthly allowance budget or ask the other to approve of the splurge.
“Splurging on an item doesn’t happen often, but we ensure that both of us are in agreement if we do decide to buy it.”
Chief Financial Officer
“My husband doesn’t trust himself in keeping to a budget so he entrusts all of our money to me. I give him a monthly allowance to spend for his own expenses,” this mama said. If anyone of the couple has splurging tendencies or magastos, it is best to appoint the one who can best manage the money as the CFO (Chief Financial Officer) of the household. This person will ensure that the family manages their money well. In this scenario, it is still important to align on money matters as a couple and not just delegate all the money management to one person. This way, the couple is still jointly responsible for money management, but the CFO ensures that they keep to their budget.
As we talked about the topic more and more, the moms I work with gave several tips on the best ways they manage their money. Here’s a list of the money management tips I’ve compiled.
1. Always pay your credit card debt in full
With credit cards, you always need to tread carefully. If you can’t control your spending, you might find yourself in debt sooner or later. Credit cards are a convenient way to spend money without bringing cash, yet if you don’t pay the balance on time and in full, it may accumulate a lot of interest charges. Interest charges on the credit card may run up to 3.50% interest per month. That is huge! For every P10,000 you owe, you pay P350 and it may compound monthly if the balance isn’t settled immediately.
2. Pay yourself first
This is one of the best advices I’ve heard when asking for money management tips. Every pay day, we must ensure that we pay ourselves by saving at least 10% of our income towards our long-term retirement plans. Some moms said they immediately invest this money in different instruments like stocks or time deposit accounts to make sure that they don’t spend this money. Make this a habit every time you receive your income. In our household, we tithe regularly so we also set aside another 10% of our income to Church. This is considered part of our “paying ourselves first” routine since we believe that tithing is our way of saying thank you to the One who gave our income first.
3. List down all your expenses per month
Use a money management app like MoneyControl to track what you’ve spent for the month. Group expenses into fixed expenses and variable expenses. If you’re unable to save 10% each month, check which expense can you cut back on. Can you spare yourself a cup of Starbucks coffee and choose to save that money instead? Skipping one cup of coffee a week may contribute to a lot of savings in the long run.
4. Get creative in saving money
Saving money is a must. If you must get creative in finding ways to save money, then brainstorm ideas with your partner on how to go about it. Do you eat lunch at work? Try to bring baon to work to save more money. Look for promo items in the supermarket. There are a lot of deals every day that consumer goods companies spend on to entice customers to buy their brands. A freebie or two means savings for your household.
5. Save up for your splurge
Don’t borrow. Save your money instead. If there’s a splurge you want to indulge yourself in, like brand new sneakers for your husband or a high-end fashion item for you, don’t borrow money for it. Instead, set aside money from it from your personal allowance budget then when the time comes to buy this item, you already have money saved for it. This way, you avoid getting into debt to buy such a high-priced item. It feels so much better to actually pay for a splurge in cash, rather than charging it on your credit card and worrying about how to pay for it later.
The general rule of thumb for money management is: Live within your means. If you need to borrow money for you to spend on something, it means you don’t have enough income to buy that item at all. Prioritize your savings and necessities in your budget plan, and the other things (like splurges!) come later.