Family money matters

I’m glad to know that a lot of our Chos! readers and followers liked our article on money matters and the value of talking about finances with their spouse or partner. 

That overwhelming response surprised me because talking about financial issues between spouses is not a common practice in Filipino households yet. 

I shared with you my own experience in handling money with my wife but it does not mean we are already a master of this topic.  With three growing up girls now, we also struggle like you young and old couples out there. We still agree to disagree all the time when we talk about monthly budgets, ballooning costs and meager savings.

You might have heard of the idea of “income minus savings equal to expenses”. Financial gurus reversed the practice of removing or deducting expenses outright from your basic monthly salary and allowances, and calling the undisposed portion or difference as savings. They say that old school of  personal finance will not teach us a good way of preparing for the rainy days.  

But it is that easy for partners to save and keep some money for short term emergency purposes or for long term ones such as investing in children’s education, retirement and critical illness?

I know a lot of couples follow different rules of thumb especially nowadays that even load credits for cellular phone and mobile data is considered a commodity or a basic need than a want or a non-essential.

“Pay yourself first” is a personal finance rule which is commonly misunderstood and for families and couples, this is even a big challenge. Who pays whom? This rule might be true for households where the spouses or partners are both working to contribute to the monthly finances. But what if it is not the case? 

Take the case for example of solo parents who account for more or less 10 million of the population of the country. There are also extended Filipino families and of course, there’s a situation where there is a full time house maker including a house husband. 

But there’s hope. Thanks to technology, full time moms and dads can now venture into any web based business especially buy and sell with the advent of online selling. Mind you, I have some friends who made it big by taking advantage of free online marketing. 

One of the things that affect family spending today is that Millennials have changing appreciation of Maslow’s pyramid of needs. This is brought about by the influence of information and communication technology, and fast-paced lifestyle.

Youngsters now own gadgets such as laptop, tablet, smartphones and various accessories which the other generations did not get to enjoy. This is not necessarily bad but those are also part of household expenses. 

In return, Millennials must try to help their parents as well to save on utilities such as electricity or water. They can display some sense of compassion if they turn off the TV or the electric fan when not in use or use a glass while brushing their teeth to cut excessive water consumption.

For the Generation Zs at 25 years old, financial coaches suggest you start saving 10% of your net pay or whatever your parents give you if you are still taking up your master’s degree. As much as possible, increase it to 15% to give you a good head start. 

After a decade as you reach midlife, try to make save at least 35% of your net income. By the time you get married, you will have a buffer when you face tough times financially.

Couples can also try the 50-20-30 rule where 50% of your family income goes to living expenses including groceries, 20% towards savings and 30% for spending including food and travel. In this rule, you can create spending buckets that will give you better control of your finances. 

But just like any “ipon” challenge, this rule can be adjusted according to age or circumstances or degree of discipline by changing percentages or priorities. And unluckily, it happens most of the time. 

Husbands and wives and their children are advised to know where they stand financially and work towards a common financial goals by communicating with each other their current state of finances, tracking their family spending and setting financial priorities together. 

Before your financial liabilities add up, set your goals as a couple or as a family, find out how the economic issues such as inflation can hit you and make it clear with yourself and your partner how much are you going to save to make both ends meet. 

Your shared rights and responsibilities over household income shall see you through as you achieve the goal of financial wellness.

For questions and comments on life coaching and this column or if you have something to share with our readers, please feel free to email or text 0917-5332322.

*Alex Rosete is a certified life coach and is part of a global coaching community called Life Coach Philippines. He is also a teacher, trainer and consultant on communication, human resources management and public administration.