Human beings are socials animals. That is why we crave companionship. It always helps if someone is by your side and understands you. Nothing better, if that person is the love of your life. I call her ‘Honey’ and we usually take household related decisions collectively. Specially those relating to money.
Following are few areas, where we complement each other to navigate between multiple alternatives that are available.
1. Make a budget
As a bachelor, I never took household budgeting seriously. But this changed after ‘Honey’ came into my life. We have been successful in drawing a monthly budget, which includes income and expense buckets. It has always helped us to stay on top of unwanted expenses. I personally use a debt tracking app, which alerts me regarding upcoming EMIs on time.
The income bucket can include all possible sources of income but exclude any unrealisable income e.g. Profit from mutual fund or shares, which is not yet sold. This is due to the fact that such asset’s value can change overnight. We saw tremendous erosion of value in the stock market during the pandemic and earlier. Hence, be extra careful.
With respect to expenses, include everything you can anticipate. Even an emergency expense due to a family emergency has to be factored in. That is why the emergency fund is so important. We are being conservative here and it definitely helps.
2. Save first, spend later
‘Honey’ always emphasised on the importance of saving first and spending later. I agreed wholeheartedly as I had also heard this from ‘ Warren Buffet’ earlier. Together we have built an emergency fund equivalent to 6 months of expected expenses. Now, we are more certain of tackling any emergency, which may come our way. It may be a job loss or health related event. Also remember that key family members have ready access to the emergency fund. Thus, always have a common fund parking account or share the credentials.
We have also automated our monthly savings. Both of us have started with a ‘Mutual Fund SIP’, wherein regular savings are parked at the beginning of the month itself. This is before we are able to think about any expenses, which is great. The plan is to build this nest for 30 years and experience the power of compounding.
3. Insurance is super important
Being the only earning member of my family, I recognised early, that having insurance is super important. I had Health Insurance since my first placement after college. However, I always relied on company provided ‘Group Life Insurance ‘. This is where ‘Honey’ enlightened me to go for additional personal ‘Term Life Insurance’, as we never know whether the next job is able to support employees with a ‘Group Life Insurance’. I am now able to sleep better at nights, knowing that the ‘Term Life Insurance’ coverage is enough for my family members.
4. Never miss a discount
I would dedicate the ‘not missing a discount’ part to ‘Honey’. She always keeps a hawk’s eye on any running discounts and employs a set of tools and techniques to receive the best. The first thing she does is focus on Grocery discounts at the beginning of the month. She would make a list of grocery items and compare the price online. Usually she does the comparison on Reliance Smart, Amazon and Big Basket apps. Orders are punched in accordingly, where best offers are available. Similar process is adopted for travel tickets. Different websites like ‘Make My Trip’, ‘ Booking.com’ etc are compared and the best price is selected.
Other tools include searching for discounts in ‘PAYTM’ and ‘Google search’. Another excellent way is having ‘CRED’ membership to avail different offers and transacting via ‘Google Pay’. I like the fact that ‘Google Pay’ would share a discount coupon on almost every transaction.
5. Last but not the least
It always pays to have a good team. Especially if your ‘Honey’ is by your side. The most important factor is trust and transparency amongst partners. It is going to be a fun journey as navigating money in daily life becomes a game and you begin to enjoy it. Take the first step and build your expertise gradually. Try to learn every day and share best money management practices with each other. The other day, ‘Honey’ shared a list of 6 tax saving tips on watsapp and I implemented few of them immediately.
Q. Is budgeting important in a marriage?
Ans. Yes, it is one of the most important things in a marriage. Many couples argue about money which may also lead to divorce. By preparing the budget together both can have a good view of unnecessary expenses. The bonding strengthens when both work towards a common goal.
Q. What is 50 30 20 budget rule ?
Ans. There 50 30 20 budget rule is a simple categorisation of percentages of your income. Needs would get a share of 50% income, wants a share of 30% and savings 30%.
Q. How should couples split expenses?
Ans. Going Dutch or 50/50 is the best way. Each one should contribute 50%. This method is relatively easy. However, where only one is earning then or earning less then it is wise to divide as per expense categories. E.g Grocery or school fees can be taken care by one who is earning less.