A few weeks ago, KM emailed me that I seldom blog about how my wife and I manage our expenses as a family and married couple. Thinking back about it, that’s true!
I wonder why that is so?
The best answer I have to that is probably because these matters have somewhat become auto-pilot for me that it doesn’t bother me that much. Frankly speaking, I wouldn’t go as far as to say I’m a good example to learn from.
In this blog post, I’m happy to share casually about some of the thought processes behind how my wife and I manage our finances as a married couple. To add on few points so that it gives the correct context, we don’t have kids. No car either.
P.S. – If you’re interested to read about things that I don’t usually write about, drop me a message and let me know!
Happy Wife, Happy Life
It may seem like common sense but when we’re married to someone we love, I would think that it is obvious we would know him or her a lot better. Sharing our goals or financial aspirations would definitely count as important steps towards achieving what we want in life.
Communicate and share about what we wish to achieve in life.
A constant example that I bring up – pool villas are right up our alley so we know exactly what to work towards. Along the way, I made a FIRE presentation deck for my wife!
With a good grasp of how your partner is like as a person, it is then much more effective to decide who gets to manage what – remember that a marriage is basically a partnership, and we want the suitable person to be handling the right tasks.
To me, this is the number one factor and once we have gotten this right, the rest will fall into place much more easily.
Housing – all about the HDB loan
First, let’s address the elephant in the room.
Regardless of whether you’re renting or buying your own home, housing expenses can potentially take up a huge percentage of our disposable income if we’re not careful in Singapore which is frequently touted as the world’s most expensive city (for expatriates).
Within a year out of university, we balloted and got our Housing Development Board (HDB) apartment in our first try. A HDB apartment is a result of the heavily subsidized public housing scheme for Singapore citizens which has enabled a home ownership rate of more than 90%.
Our apartment was far from the city centre – which meant it was very affordable.
Not many people wanted to live here in the beginning. Come weekends, there would be residents flying enormous Japanese koi kites at the empty grassy areas.
This is an extremely valuable and free tool to have in your arsenal when buying homes, especially in up-and-coming residential areas – the URA Master Plan. In residential areas, it would largely be covered with orange patches for HDB or condominiums.
The jackpot that you want is the light or dark blue patches that could likely turn out to be malls or retail areas, but take note that it could be five or even ten years before construction begins. Some folks do not like to stay near places of worship so this also helps to avoid potential landmines.
To cut the long story short, our HDB apartment on the 15th level that we bought on the cheap at $236,900 in 2008 is a few minutes walk to a neighbourhood shopping and medical facility with Starbucks and McDonald’s!
And because our apartment was so affordable, we’re paying it entirely out of our CPF Ordinary Accounts monthly at $340 each (for thirty years) with plenty of leftovers for buffer. There isn’t any special need to split it 60/40 or 70/30 because one partner is earning more than the other.
Regarding the loan we took up, we took a 30-year loan with HDB – read about our thought process here. This is the only loan and obligation that we have, and to be honest, I’m not in a hurry to pay it off.
Giving our own parents allowances
The second elephant in the room.
The way we manage parents’ allowances is to each determine how much to give to our parents. On top of that, we would each settle our side of things, so as to speak.
This way, there is no conflict if we wanted to give more (or less), depending on the situation and our relationships with our family.
For example, my parents do not have much in the CPF accounts due to their self-employed status and having used most of it for their current HDB apartment. However, they do have a tenant that is bringing in some rental income.
To boost their financial security, I have transferred $40,000 into my mum’s CPF Retirement Account to strengthen their financial position early this year. Every single family has a different financial situation. Discuss and figure things out as a married couple.
One thing to highlight is that there isn’t any friction in this area right now because there aren’t any issues (e.g. medical) in particular that require special attention.
Household expenses – who’s paying for what?
There is a quick and easy way we do this – we have a simple joint account set up with POSB bank.
Every month, both of us contribute an amount of money we’re comfortable with into the joint account depending on what we’re drawing for our salary, and this process is automated via monthly transfers. This amount has fluctuated wildly in the past due to the fact that my wife and I have done crazy things with our career choices.
I mean, this part is what we have discussed over and agreed as a married couple. Sure, take the freedom to pursue and attempt what we want – both of us agreed that we didn’t want to end up with regrets over what we feared to try, and we could only do so when age is on our side.
I supported my wife when she left her IT-based job for a venture into the events industry. She supported me when I left mine for a taste of the hospitality niche. Lady luck must have been smiling as us because both of us were no longer in those when Covid struck.
So – talk things over, and contribute what we can. From this point onward, it is OUR joint account. Don’t ever let money matters (e.g. who contributes more or less) mess with relationships.
The joint account then becomes the central bucket where funds are drawn from to pay for our household expenses. When I say household expenses, it covers everything from bills, utilities, repairs, food, groceries etc – which includes almost everything.
I manage a central budget for the household, plus the fact that I’m the one paying first for most of the expenses (see below section) – I end up having a good grasp of what the numbers are looking like and try to keep the situation under control.
It may sound crazy but we generally don’t go overboard with spending on food or buying stuff for our home, so there wasn’t really a need to keep things in check.
Free reign over what’s left
My wife and I both manage our individual budgets for matters such as shopping (quality of life), savings and investments (retirement) etc.
The idea is really simple – as long as we’re setting aside funds for savings and investments and retirement, we are free to use our money any way we see fit.
Remember what I mentioned at the start of this post? Happy wife, happy life.
You have to know what kind of personality traits your spouse has in terms of managing money, and jointly come up with a plan that is best suited for him or her.
Joint investments based on trust
The way we manage our investments is definitely unique to us, and this largely stems from the fact that my wife has close to zero interest in investment and pretty much the majority of personal finance matters.
Understanding that there is a need to set aside money for savings and investments doesn’t equate to having interest in doing so!
Therefore, I act as her part-time financial adviser and help to put together plans for protection (insurance), contingency (savings, emergency funds) and retirement planning (investment).
Any money that she has planned for investment, it is invested via my investment accounts and capital-guaranteed by me. This was exactly the case when we made a combined investment in Syfe REIT+ portfolio and made some investments for her.
Is it based on trust? Absolutely.
I trust my life with her, and she trusts hers with me. I almost lost her a few years ago, and that made me understand exactly how important she is to me, what I was willing to give up for her, and how much harder I was able to push myself in order to achieve our desired lifestyle in future.
To be honest, this mode of managing investments probably wouldn’t work for many people.
Mi(ni)ster Finance is best at optimizing reward points
I love finding a good deal. I enjoy optimizing actions for rewards. I have fun “exploiting” systems.
As the Mr. Finance of the household, most of the household expenses are “piped” through my credit cards, and I have an intricate system of optimizing expenditure for cashback and miles.
To me, expenses are a huge resource – just like how individuals can clock company or business expenses on credit cards and claim to earn millions of miles, I do the same for my household and earn 3-figure cashback and 4–figure miles on average each month.
These savings and miles have allowed us to travel on business class flights on a regular basis before the Covid situation.
That’s all from me
In this blog post, I shared a little bit on the common areas that we had to tackle as a married couple when it comes to managing our finances –
- Allocating roles
- Housing loans
- Parents’ allowances
- Household expenses
- Optimizing expenses
It probably doesn’t cover every single area or topic because it wasn’t meant to be so! It was written simply based on my experience and what we are still doing now. If you’re curious about my budget template, head over here.
Question – should “Getting Personal With Finance” be a new blog post series for me to keep writing on?
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Hello! I’m Kevin, Turtle Investor
At the age of 30, I am the personal finance blogger who laid claim to a negative net worth of minus $25,755.
Seven years later in 2019, I hit CPF Full Retirement Sum (FRS) of $176,000 without making a single cent of CPF top-up. More tidbits about myself here if you’re curious. My blueprint for financial independence can help give you a headstart in your own FIRE journey.
I am married to a lovely wife and that means dual income with no kids. In my free time, I chase miles so that we can fly in business class. My hobby is making pocket change off this blog and sharing everything I know with you!
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