Saturday, February 4, 2017

Household Budget Management


I have been asked a number of times how Rolly and I deal with our household finances. I know that for some couples, budget management can be a serious issue, and no matter how bad it may sound, money could be a frequent root of arguments. Luckily for Rolly and I, it has never been a problem. We already agreed on this subject even before getting married, and it helped that the arrangement we wanted was the same arrangement both our own parents employ --- the wife is the Chief Finance Officer. *wink*


This is how it goes financially between hubby and me: he gives me his earnings (he gave me his ATM days after we got married without me asking for it!), and I give him his allowance bi-monthly. From a single pot (his income + mine), I do the budgeting using a budget template I created. I set aside our ‘mandatory’ savings first, then the rest goes to bill payments, amortizations, investments, and other expenses. If there’s still some left after all the expenses are paid off, the amount rolls back to our savings again.

This is how my monthly budget sheet looks like:



Others say that one drawback of this scheme is that the husband and wife don’t have their own money, and that’s true. But in our case, we feel that the advantages outweigh what could be viewed as disadvantages by others:

PROS:

  • This prevents the “it’s not mine anyway” mindset where one doesn’t care about an expense assigned to the other (e.g. it’s okay to overspend on groceries because it’s assigned to the husband; never mind the electricity charges since it’s the wife’s, etc.)
  • We have a full view of the household budget so it’s easy to see where we can further cut back on if needed.
  • We see our savings as a whole and together, we get to set realistic financial goals.
  • If there’s a nice-to-have big ticket expense, it’s easy to check if we can afford it without going bankrupt.

CONS (and how we mitigate them):

  • Hubby doesn’t have extra cash, he only has his allowance for the period.  To counter this: We have a joint ATM account that always has money, so Rolly or I can withdraw at any given time should we need cash. For other things which can be paid for via credit card, we use the credit card. :)
  • Related to the first item, hubby doesn't get to surprise me with expensive gifts anymore. Hehe. Though I always hint that he can use our ATM money or his credit card to spend on whatever, he just doesn't! Whenever he plans to give me something, he gets it from his allowance. Ma-pride eh! Actually, this disadvantage affects me more. =P  To counter this:  If I want something for myself, I tell him and say, 'Ito na ang gift mo sakin.' :)


Though there is no hard-and-fast-rule in budget management, and no single system is universally effective across all households, Rolly and I are pleased at how our own scheme is working for us. Another style may be working nicely for other couples, and that's just as great!  To each his own. :)

Anyway, let me end this by sharing a useful infographic I stumbled upon on Google Images, thought it might be nice to include these general tips here. :)




Cheers,


3 comments

  1. Hi Joyce! :) We also have only one fund. However, we maintained our personal atm accounts where we put whatever we saved from our weekly allowances and a little of whatever bonus we have for emergency purposes (flat tire, office contributions for gifts/donations to officemates) and for gifts to each other (haha!). But both of us know how much din yung laman ng atm for transparency purposes. :)

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