Millennial Couples' Guide to Sound Money Management


Let's face the hard truth, millennial couples. Love alone won't keep you alive. Unfortunately, Meralco doesn't accept hugs for your electric bills and food vendors don't accept kisses for their products.

Remember this:

"The couple that lives practically together stays in love and happy forever."

So, here's a short but sweet guide on how you and your special one can soundly manage your finances and avoid money-related arguments in the future:

I met my wife when I was working in the BPO industry. Just like any other millennial couple, we want to create great memories together every single time. So, every payday, we made sure that we dine out, travel around the country, and just spend everything that we have after we've paid all of our bills.

In the end, we accumulated nothing but unhealthy fats and happy memories. Although happy and unforgettable memories are great in a relationship, the non-existence of savings and a financial plan isn't. It caused arguments and we questioned ourselves whether or not we will have a bright future financially together.

Until one day, one important thing changed our lives financially. We decided to become responsible handlers of money—thanks largely to my wife who pushed me to get better when it comes to money.

Today, we are happily married and we have:

✔ Our own house
✔ Our own car
✔ Our own money
✔ Our own insurance & investments
✔ And a great plan for the family that we are going to build in the future

The point is, you and your special one, no matter how wasteful you currently are with your hard-earned money, have hope and a fighting chance to turn things around for the better.

We became financially responsible by planning together, executing our plan together, and doing our best to succeed financially as a couple.

Let's get into more details:

When we decided to become a responsible manager of our money, it wasn't by accident. It was intentional and we sat, talked, and planned together.

Sit down and talk.

This is the first and one of the most important parts of your journey to financial responsibility as a matured and thinking millennial couple. Sit down with your partner and talk about your goals and dreams for your future.

Do you guys want to have your own house someday? Do you guys want to have your own car someday? How about insurance and investments? Do you want to have a sizeable amount of savings in the bank? Do you want to get married and have kids?

List down all of your goals and dreams and make sure to make it realistic, practical, measurable, and time-bound. And lastly, don't forget to put an amount on each of your goals because you and I live in an economic world. There's no such thing as free lunch anymore.

Develop a plan of execution.

Once you have listed down all of your goals and aspirations in the future as a couple, your next step is to create a plan of execution. Without this, you guys are just wishing.

Here's a good example:

When developing a plan of execution, make sure that you break down a goal into small and achievable tasks. This will enable you to make small but steady progress that will eventually lead you to the accomplishment of your goals.

So, you are done sitting down, talking with each other, and setting your goals for the future. You already have your plan of execution and you are ready to roll. What's next? Well, the real work begins.

Know and execute your part.

Make sure that you are aware of your part in the plan that you created. This will enable you to have a clear idea of what is expected of you so you can achieve your relationship goals together. The last thing that you want is for your plan to fail because of the lack of clarity and unmet expectations.

Teamwork makes the dream work.

Sounds cheesy, but it's true. You are a couple in the first place. Teamwork will be an integral part of your plan. So, when the other fails, offer your understanding and support until the one who failed gets back on track.

Review your progress.

If your goal is to have a significant amount of savings in the bank as a couple, check how much you currently saved today and determine if you are on track or not. Adjust the plan if needed, but don't change the goal. Never settle for less.

Once your plan of execution is in progress, what's the next step? Well, try to succeed as a couple. Here's how you can do it:

Celebrate every wins no matter how small or big it is.

Did your partner get a new job that will help you achieve your couple goals? Celebrate. Did you, as a couple, achieved a significant milestone in your relationship goals? Celebrate.

Celebrating both small and huge wins will enable you to enjoy the process of achieving all of your goals as a millennial couple. After all, as Steve Jobs once said, the journey is the reward.

Lift each other up.

I mentioned earlier that teamwork makes the dream work. It is true. One of the advantages of achieving your relationship goals as a team is that you won't feel alone. Lift each other up. Empower, motivate, and inspire each other. Achieve great things together.

Don't forget that you and your partner are equal and the same.

It will most likely happen that your partner could earn more than you do. This shouldn't matter. Knowing that you and your partner are equal and the same will enable you to achieve your goals faster. The last thing that you want to do is to look down on your partner just because you found your success better and earlier than the other.

Money is a sensitive topic in every relationship. Here are a few tips and tricks that my wife and I apply as a couple:

Have your own individual income streams.

Almost all relationship goals and aspirations will be achieved faster if you have more financial resources. If each of you earns an income, the chances are high that you will be able to finance your goals faster than having only one stream of income.

Don't mix your money.

My wife and I found out that we felt better when we have our own money. This could work for your own relationship as a millennial couple or not. However, having your own personal money will inspire you to achieve more—improving your overall lifestyle as a couple.

Create a household fund.

If you will choose to have separate personal money, then you guys should create a household fund. This should be used for your shared expenses like house payments, car payments, utilities and other bills, and your day-to-day living expenses.

Make a budget and track all of your expenses.

Time and again, we hear that a budget isn't here for us to feel deprived. A budget is a tool that will help you dictate where your money as a couple will go. Tracking all of your expenses down to the last centavo will enable you to see if you are getting out of budget or within your comfortable range of expenses. Like what Dave Ramsey once said, it is better to know where your money is going instead of wondering where it went. 

Build an emergency fund as a couple, but insure yourself as an individual.

An emergency fund is something couples should save for. This will be useful to make sure that your goals won't be affected by unexpected and emergency expenses. However, an emergency fund isn't enough. You should also get your life insurance as individuals. Here's why.

Let's say only Partner A is insured but Partner B died without an insurance. Then, Partner A will be left with nothing—shouldering all of your funeral expenses and debts. But say both partners are insured, then you guys are both protected against life's uncertainties which is death, accident, and sickness.

Enjoy life responsibly.

Along the way, my wife and I learned how to enjoy life responsibly without spending a fortune and all of our savings. We became more mature and practical when we deal with anything in life. When we are having the urge to spend for no particular reason, we ask ourselves if there are better alternatives.

For example, if we want to go out and eat in a buffet, we ask ourselves if there are better alternatives that will allow us to save money but still get the same result which is to enjoy great food, have a good time, and get full. So, we buy delicious but affordable food instead and watch a movie at home. Same results, less money spent.

Develop an inner scorecard.

We learned this from Warren Buffett, arguably the world's best investor. Having an inner scorecard means not giving a dime about what others will think or say about how you live your life. As human beings, we are driven by the desire to get the approval and admiration of our peers. Having an inner scorecard allows you to make decisions that will improve your life instead of making decisions just to impress other people.

Hire a financial adviser.

In the Philippines, getting the services of a financial adviser is free because professionals like me earn commissions. So, take advantage of this fact and get yourself a financial adviser and seek their expertise about managing your finances as a couple.

Financial planning is life planning. It is all about you, your goals and aspirations, and how financially disciplined you are. Numbers and investment instruments are just tools that will get you to where you want to go.

Sound money management as a couple is all about planning together, executing your plans together, and succeeding together.

About the Writer

Alfred Cardenas is a Licensed Financial Adviser and Certified Investment Solicitor. Follow him on social media for more practical money tips and advice.

   


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