Things about Financial Management Every Newlywed Should Know
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Did you know that economic issue was the second main cause of divorce in Indonesia*? It cannot be denied that financial matter is very crucial in marriage life. An independent financial planner, Debby Prazna Okky, S.Mn., RFA, agreed on that fact. According to her experience, dishonesty about financial at the beginning of marriage can trigger disputes among the husband and the wife. "Every individual needs to know his/her monthly salary and income, as well as debts," she suggested. Information about salary and income is needed to count the plans, while personal debts before marriage, such as credit card bill, should be communicated because it will influence the future cash flow.
Debby also recommended to not continue your financial habit when you were still single to your marriage life. The reason is that there are two different individuals in one marriage life whose each of them has different tendencies. Not only that, household needs are absolutely different from your single life's needs. The household needs are mostly assets that will be owned and used together, such as house and child's needs.
When managing household finance, newlyweds can consider these strategies that were suggested by Debby:
Dividing into several expense posts These expense posts should have been decided since the start and applied every month. The type of the post depends on the couple's needs. For example, their monthly incomes are divided into installment post (30%), personal shopping post (20%) and investment/savings post (10%). The couple needs to have a note that records all the expense posts to prevent an impulsive expense.
Dividing into a weekly expense Both husband and wife's monthly income is divided into a weekly expense. This division should be done after setting aside several percentages of some important needs, such as savings and emergency budget. For example, with a monthly salary of IDR 10,000,000, 10% is set aside for investment. Then, the rest of IDR 9,000,000 is divided into a four-week expense (in one month). Thus, each week this couple has an expense budget of IDR 2,250,000 for daily needs.
Debby highly recommended couples to have a joint bank account since living together. This is very necessary to manage the monthly outcomes, such as electricity and water budget, as well as monthly groceries. "I also advise couples to have a joint savings and investment account to make sure their future financial plans can be realized," she added.
Even though the journey of married life is between two individuals, Debby reminded newlyweds to decided who is going to be the financial manager. The financial manager's task is to manage household's outcomes and investment, while his/her spouse will help to distribute the outcomes based on the breakdown made by his/her spouse who acts as the manager.
In order to have appropriate financial management, Debby shared some tips that new married couples should consider.
Communication and openness Couple needs to be honest and open since the beginning of their marriage to prevent unwanted problems in the future. Every husband and wife should spare time in a day to sit together and talk about the household's financial management.
Avoid consumptive debts Consumptive debts mostly happen in during pre-marriage life, such as mobile phone installment or holiday expenses. However, when you are married, you'd better lessen the consumptive debts and start to shift to productive debts, such as house and car installments.
Prepare an emergency budget This budget is needed in an emergency situation, such as an accident or illness. Debby suggested an annual emergency budget for newlyweds should be six times your monthly income. It should be a liquid budget which means it can be promptly withdrawn. Therefore, the emergency budget should be put in a saving account. If you have an excessive budget, you can divide it into a deposit and precious metal.
*) Direktorat Jenderal Badan Peradilan Agama (Badilag) Mahkamah Agung, 2017.