Money can’t buy you happiness but learning how to work together as a team to manage your finances will go a long way in building a happy marriage. Here are some tips on how you can stretch your dollar, especially in these uncertain economic conditions.
Watch out for those big ticket items
Consider your biggest expenses for the last year. Think about those items which were ‘wants’ and not ‘needs’, for example, that extra handbag, that top-of-the range hand-phone, and expensive gifts for friends. Think about whether these were necessary or could have been replaced with less costly, more durable, less faddish items.
Going forward, make it a point to plan your purchases carefully, taking into account your budgeted expenditure each month. Be disciplined and avoid buying on impulse. If there is an item you need to have, consider saving up for it rather than take up an installment plan or use other credit facilities. Discuss with your spouse whether it is necessary to make that big purchase and see that it does not eat into the budget for necessities.
Consider ongoing expenses
Some items give rise to recurring or ongoing associated expenses. Don’t make a decision based on the purchase price of the item alone and consider what some of the ongoing expenses might be.
For instance, when deciding to purchase a car, factor in the cost of insurance, petrol, parking, and road tax, which are monthly or annual ongoing expenses. If you intend to purchase a car solely for commuting to and from the office, it might be worth asking yourself whether you really need to own a car and whether it would be more cost effective to consider alternatives such as getting a weekend car, car pooling or taking public transport.
Opt for less expensive forms of entertainment
Eating out or taking holidays abroad can constitute a substantial portion of your expenses. Consider planning for shorter holidays at nearer destinations or pick up good deals during promotional and off-peak periods.
Less expensive forms of entertainment can help you save quite a bit. Visiting the library or museums, walking or cycling in the parks can be just as romantic and make great dates. You could also look out for public holiday promotions where entrance fees to places of interest such as some museums are waived.
[1]
For quality couple-time, you can also seek help from parents and in-laws to bring the kids out for the evening while you fix dinner together with your spouse instead of eating out. What could be more special than cooking for a loved one? Taking that idea further, learn to make jewelry, knit scarves or make quilts as they make unique and meaningful gifts and cost a fraction of something similar from a shop.
Draw up a budget to manage your household expenses
With a budget, you can track your income and expenses and scan through your expenses to look for possible cutbacks. You may be surprised at how much you are spending on unnecessary habits like snacking and smoking.
If you don’t have a budget, it’s not too late to start one now. Below is a simple template you can use to get started. Sit down with your spouse and list out how much is currently spent on each item, and think about how you can trim down on each item. Work out the target amount you are prepared to spend. Record your expenses regularly and help each other stick to the agreed budget. Review the budget together frequently; there may be new expenses to include especially if your family is growing or some expenses to drop as your needs change.
|
|
Our current monthly expenses
|
Our targeted monthly expenses
|
|
Savings - save at least 10% of your income before you spend
|
$
|
$
|
|
Rental or home loan payments
|
$
|
$
|
|
Utilities
|
$
|
$
|
|
Food
|
$
|
$
|
|
Transport
|
$
|
$
|
|
Medical
|
$
|
$
|
|
Clothing
|
$
|
$
|
|
Others
|
$
|
$
|
|
TOTAL
|
$
|
$
|
Here are a few tips to help you save on your various day-to-day expenses.
Tips to save on your grocery bills:
ü Consider less costly alternatives. For instance, most local or regional produce should be less expensive than those imported from further away and there is still plenty to choose from.
ü Consider various supermarket in-house brands which are usually more cost-effective.
ü Look out for special offers and discounts. These can help bring your weekly shopping bills down. Buying in bulk often works out to be better value than buying in smaller quantities.
Tips to save on your utility bills:
ü Use fluorescent or energy efficient lamps instead of incandescent bulbs
ü Use the washing machine only when there is a full load and avoid using the hot water cycle
ü Use water-saving devices like tap thimbles and cistern water-saving bags
ü Use energy efficient appliances - look out for the Energy Labels on air-cons and refrigerators
ü Do not leave your TV, computer and other appliances on standby mode - switch off the power at the socket
ü Set air-con temperature to 25oC
ü Do not over-load refrigerators or put hot food in it
Tips to save on your subscription bills:
Ö Cancel or cut back on TV, newspaper, magazine and internet subscriptions if they are not fully utilized.
Ö Check carefully all the miscellaneous services you are getting as part of your mobile phone subscription. These can add significantly to your monthly bill. Ask yourself if you really need them.
Ö Use the mobile phone for important conversations, not for lengthy or frequent chats.
Tips for stretching that dollar for your children’s expenses:
ü Use second-hand books that are in good condition
ü Benefit from subsidized rates (if any) offered by the school’s dentist
ü Encourage creative use of recycled materials for art and craft
ü Cut down on fast food
ü Opt for group tuition if personalized attention is not required
ü Attend enrichment courses in community centers instead of private courses
ü Apply for bursaries and scholarships if your child is eligible
Use credit prudently
Stretching your dollar does not mean living on credit. As a general guide, your monthly debt commitments should not exceed 35% of your monthly income.
Think carefully about the costs and your ability to pay interest and repay the amount borrowed before taking on debt. Where credit is offered with low or even zero interest charges, check whether such promotions come bundled with other terms and conditions that you can abide by. Additional interest and other penalty charges are typically imposed if you do not make the payments on time.
As an example, credit cards offer you the convenience of making cashless payments. But if you do not make the payments due in full and on time, you could incur substantial charges. Many credit card issuers impose an interest charge of 24% p.a. Consider this. If you chalk up a credit card bill of $1,000 and decide to only make the minimum payment of $50 a month, you would take over two years to pay off the entire bill. Furthermore, you would have paid $290 in interest charges. That’s 29% of the initial $1,000 bill!
Shop around for a home loan and review it regularly
If you are planning to take up a loan to finance your home, do shop around for one and discuss in detail with your spouse before coming to a consensus on the best arrangement that meets your family’s needs. For information on what to look out for, you can refer to the “Key questions to ask the bank before taking up a home loan” guide on
www.moneysense.gov.sg
Review your home loan regularly to see if you can get a better deal by refinancing, particularly so after the lock-in period. But do check transaction costs and make sure that when you factor these in, you don’t end up paying a higher cost.
Conclusion
Every healthy marriage should start with a healthy budget. Work out as a couple whether each purchase is a “want” or “need”. By discussing at length and working out the budget with your spouse, you will soon be able to pick out what the necessities are and how much money you can spend on fun items like shopping and travel. Working as a team will help you make your money go further. Happy budgeting!
This article is contributed by the Monetary Authority of Singapore as part of the MoneySENSE financial education programme. For more information on MoneySENSE, please visit www.moneysense.gov.sg
[1] http://yesterday.sg/detail/enjoy_free_entry_to_nhb_museums_this_christmas/