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Tuesday, August 08, 2006

Financial Model For Couples

I just came from reading Sesame's post on Women, don't shortchange ourselves and since I have too much to say, I decided not to comment and write another post myself.

One of the things a married couple must handle together is money, naturally. I believe there are clearly 3 ways one can choose to manage the money. To me, there's no right or wrong way. What works for one couple may not for another. What works for each couple is the right way for them as long as they (both) are happy with the arrangement. As a couple we can choose to manage the money either:

  1. Separately - I earn, you earn. I pay my bills, you pay your bills, the rest we divide and pay separately. I have my bank account, you have yours. I don't ask about yours, you don't ask about mine. This works fine for many couples but I personally don't like it, but thats just me. I think it works well if you both have lots of cash to spare so theres no need to worry about money. Otherwise, it can give rise to potential problems if you can't agree with how the money is spent.
  2. Jointly - You pool your resources together, then prioritise where and how the money should be spent and you try to stick to those priorities. We do this, even though I don't contribute to the finances. Well, even if I were earning, I still like this arrangement. Although not everything should be pooled jointly, there should be some degree of autonomy ie having separate as well as joint accounts but the idea is to share and discuss the financial responsibilities. We prioritise our money in this order, making sure we can pay the monthly household bills and mortgage, investments and savings for the future for the kids and retirement, little things to make the kids happy, and lastly ourselves. As for investment decisions, I like to give my opinion but generally I don't mind leaving that decision to hubby.
  3. One party manages - To me, this is the worse kind of arrangement but then again, thats just me. Unless you have a responsible partner who knows how to save for the future as well as relax a bit when called for, having one person manage the finances fully either places too much burden on one party or it can give rise to mismanagement.

Just like everything else in a marriage, money issues should be handled with care, consideration and lots of give and take. We are afterall very different creatures and the way we have been brought up shapes to a certain extent the way we spend our money, ie whether we are spendrift, savers, frivolous or careful with money. When we are very different in our spending behaviour it can lead to potential conflict so we have to discuss it and come to an agreement on the preferred way to manage our money.


  1. hehe... we went for the joint options... but I always put my wife's name for most of the savings or investments... now is my son's name pulak... LOL!

  2. we are 80% 1.. 20% 2.. only big amount do we try to settle them jointly. :P

  3. I used to do 3 when I realised that my hubby was bad with his money management. So for a few years, he credited his salary into my account and I managed everything. But like what you said, one must be flexible otherwise can cause some fiction when questioning too much. So nowadays, I ask for one lump sum allowance for the household. He'll pay his own bills.

    Anyway, he's quite generous with the family so whenever he can afford it, he'll foot for everything even though I work. Because of that, I do not mind sharing my money with him when needed. My view is that if a couple is committed to a r/s, then sharing of money is not an issue.

    Managing money jointly is okay but I've come across certain couples who practice it until it is so clearly divided. That means each party must contribute 50-50.

  4. Ah money, the oil that runs through my veins. Never can have enough of it :)

    In our small, single-income family, I usually decide on where the money goes. We do not buy anything that can be considered big-budget so we have no issues with joint decisions in such matter. I do suppose that when the time comes and we need to furnish Brae's own room, we will jointly decide on what to buy.

    I am fully aware of wifey's personal finances, where her accounts are, etc. and vice versa. As for a secret account she has for emergencies (i.e. when I leave her for another woman), I am 100% sure she has none for the simple reason that she is very financially un-savvy. I would probably have to force her to open one for her own use (which she recently did but it isn't a secret account).

    Being fair to her, I do not have a secret account as well (for the record lah!).

    We don't have a budget, we just run our daily lives by buying only what we need and even so, nothing frivolous or fancy. Just the essentials. We do, however, allocate a certain percentage of my salary into savings and insurance. 20% is the target but it varies from time to time.

    Haven't bought clothes for myself or wifey for ages. Haven't bought flowers for her for eons. I hope she understands.

    Whatever arrangement couples have in relation to money, problems will invariably arise arise when there isn't enough of it.

  5. Wow, very confusing hor? We never did 1, 2 or 3....both have access to accounts but everything just flow in and out with little hassle. Miracle? The thing is, money is of little importance to my husband. As long as there is food on the table, roof over the head, clothes to keep warm, bob's his uncle.
    You are right....at the end of the day each couple to their own and must be comfortable with their sort of financial control.

  6. money is always the culprit in relationship when you are short of it. For us we choose option 1 + 2 and a bit of 3 :P. Since we are both working and our basic pay is the same, so some of the things are paid by hubs and some by me. But of course with his extra allowance, he will also give extra for the household allowance, which sometimes if there's spare, I'll keep for rainy days knowing that he might not do so :)

  7. Sometimes it is good to have a joint acct as one partner can hinders another spendthrift frenzy. My hubby is quite lazy when comes to handling the financial payment; hence leaving me doing all the grunt work. I don't mind as I'm more organized than him. At times I do wish he would take an interest to help out. *wishful thinking*

    I guess for a woman, it's great to be the key holder for all bank books, if the man want to "curi makan" he can't. But then again, if men REALLY want to "curi makan", they will think of ways to cover their footstep.

  8. egghead,
    Well, when you have more than one, then you'll have to think of how to split it into more names pulak. ;)

    zara's mama,
    I guess most ppl will have a mixture of styles. We are probably a mix of 2 & 3 since I don't pay the bills but it feels like 2 because hubby keeps me in the know. Somehow we just sort of moved into this phase from a mixture of 1 & 2 while I was working previously. Then, I would pay for my own credit card and handphone bills while he pays for his own plus the household ones most of the time.

    Dividing everything 50-50 is a bit much like you said. It'll be really hard to do that as what its subjective. Whats 50 to one may not be to the other. Lol!

    You have cleverly summed it up.

    "Whatever arrangement couples have in relation to money, problems will invariably arise arise when there isn't enough of it."

    "....everything just flow in and out with little hassle."

    Thats ideal!

    Theres usually a spender and a saver within the family and the spender need not necessarily be te woman. ;)

    " if men REALLY want to "curi makan", they will think of ways to cover their footstep. "

    Lol! Yes, the keyword here is REALLY want to..

  9. Nice blog!

    Well said! Nothing cannot be discussed between husband and wife.

  10. pablopabla,
    Hi there. Welcome to my blog.

    "Nothing cannot be discussed between husband and wife."

    In fact these things should be discussed even before getting married but very few people do. Lol!

  11. Even if they discuss, perhaps due to intense "i love you, you love me" feelings at courting stage, they think they can compromise. Most things will be "Okaylah, whatever you say lah. I will follow you lah" at that stage.

    But after kahwin, true colours come out :P

  12. pablopabla,
    Thats why they say the first 3 years of the marriage is important. After the honeymoon stage is over, see whether you can live with all the surprises. For me, hubby always tell me there is no surprises. He says before we got married, I don't give you flowers. Now, after marriage, I still don't give you flowers!

  13. We are now lima tahun already. Still got surprises, once in a while :)

    That keeps the flame burning :)

    Hmm....that reminds me, I haven't bought my wife flowers for some time oredi....


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