Sorting out finances before 'I do'

By making financial plans and taking steps to achieve them, couples can have peace of mind

Wedding planning is supposedly a breeding ground for arguments - my fiance and I are not exempt.

Some of the disagreements are resolved quickly, like whether we should print out invites, or adopt the more eco-friendly option of WhatsApp messages. (We'll send out printed ones for the older folk, and send our friends digital ones.)

But other times, they are heated, especially when they expose underlying differences in how we approach our finances. These are more long-running, and will take time to address.

For example, I track my expenses, have segmented saving piles, and monitor my investments occasionally.

Meanwhile, he is comfortable with his relatively high savings rate, since he doesn't succumb as easily to costly beauty treatments and expensive shows as I do.



I abide by the adage that "what is measured gets managed". He, on the other hand, thinks over-planning leads to stress and inflexibility.

This gulf in how we prepare for our future has led to worry and frustration on my end.

How will we afford our first home? Will we be able to give our children the possibility of an overseas education if they need it? Can we retire without anxiety?

Financial problems are commonly cited as one of the reasons marriages are dissolved.

So, we are taking steps to set up good financial habits to minimise the chances of friction.


Experts often say that the key to a healthy relationship is a clear channel of communication.

Frank discussions are the next best thing to mind-reading. This means asking hard questions about another's financial situation, practices and goals, like whether he or she has credit card debts, and how we are influenced by our parents' habits.

It is also a good time to find out if he desires to own a branded car, or if she wants to live in a bungalow eventually. Setting expectations, especially about big-ticket items, is the first step to drawing up a plan to get there.

At our marriage preparation course, I was shocked to find out that he was willing to set aside at least 10 per cent of his income for a "giving fund" for charitable causes.

His kindness remains one of the most attractive things about him, but earmarking a third of our income purely for gifts - we tithe to our church and give our parents a token of appreciation - would make it difficult to reach other financial goals.

The most immediate of these is paying for our wedding in November and, after that, our home, for which we are on the lookout.

I confess that I reacted with incredulity. After I had calmed down, we agreed to set aside a more manageable 3 to 5 per cent for this fund.

It is a healthy compromise for our at-times conflicting goals of being financially responsible, and being generous.


After mapping out broad ideas, the next step is execution.

Most marital counsellors suggest setting up joint accounts, into which both parties' salaries are funnelled, and from which household expenses are paid.

But they offer varying advice on whether each spouse should have a separate account, on top of the joint account.

Some think this could lead to trust issues, as it is up to each party to disclose how he or she spends the money.

Others believe having one could minimise conflict, especially if couples disagree on what counts as worthy expenses.

For example, they could set aside $500 each for unabashed purchases. That way, an 80 cents kopi drinker is insulated from the shock of his partner's fancy $8 coffee.

Mr Thomas Zhuo, who runs the finance blog My 15 Hour Work Week, says it doesn't matter if couples do not get joint accounts: he and his wife do not, and it has worked out fine.

"The crux of the question is the level of transparency - whether both individuals see themselves as one financial unit, and how the fiscal burden is shared," he says.

If the fiscal burden is split equally between couples, a joint account would be more convenient, but it would work out just as well if 50 per cent of expenses is deducted from two separate accounts.

A joint account could also help couples work towards certain goals, like each contributing $500 to save up for a car's down payment, he adds.

"It boils down to whether the couple are on the same page with regard to future goals. If one wants to retire early while the other prefers to indulge in more luxuries and enjoys working, it might make more sense to separate the finances to avoid conflicts," he says.

My fiance and I will get a joint account, but also maintain separate accounts for our personal indulgences.


Next comes what I believe most find to be the hard part: how much to save, and where to invest the money.

Another blogger, Mr Lionel Yeo of, defines savings as expenses one is likely to incur in the next five years, like a wedding, down payments for a house, and the immediate costs of having children.

The costs of hospitalisation and delivery can range from $3,000 to $6,000, and will be bumped up to $8,000 to $10,000 if a caesarean section is needed. Couples must also factor in confinement nanny costs, if any, and baby supplies, among other things.

My fiance and I will have to save more and spend less on eating out - our biggest indulgence -  if we would like all these things to come on board within the next three to four years.

Investments, on the other hand, are long-term aspirations, such as retirement and financial freedom.

Mr Yeo says: "It's absolutely critical to start investing from a young age to take advantage of the power of compound interest and let time do the heavy lifting for you."

Mr Zhuo adds that investments are critical if one needs his wealth to compound at 5 to 6 per cent in order to achieve his financial goals or dream lifestyle.

Currently, about a third of my salary is ring-fenced for savings.

I have also been investing another 15 per cent in exchange-traded funds - open-ended investment funds that are listed and traded on the stock exchange - since I started work 31/2 years ago.

I also channel 90 per cent of my annual bonuses to my investment pool, though this percentage had to be lowered this year because of our wedding.

My biggest concern is diversifying my portfolio, which has few fixed-income securities, and is way too exposed to the American market, especially in the technology sector.

On the other hand, my fiance has not waded into investments yet, partly because he started work only this year.

The difference in experience had led to some unhappiness early in our relationship.

Mr Yeo's advice? "The savvier one should guide the conversation, but make decisions only when both parties have agreed."

We have since decided to play to our strengths: I will guide the conversations surrounding our investments, while my fiance will monitor our savings and expenses. He will also look at our insurance options.

Both of us must sign off on our decisions together - and not blame the other when an investment goes awry, or calculations for a big-ticket item are way off.


Addressing all these concerns about money can make for unpleasant conversations.

Some may find that talking about dollars and cents sucks the romance out of the relationship.

However, to us, it is a means to an end - of building a marriage based on trust, responsibility, and love for one another.

Because life is unpredictable - we do not know if or when one of us might lose our job, or fall ill - it is important to save for a rainy day.

So by making financial plans and taking concrete steps to achieve them, we create a buffer and "buy" ourselves some peace of mind.

That way, when the vagaries of married life come around, we will have less fire fighting to do, and more love to give.

A version of this article appeared in the print edition of The Sunday Times on February 26, 2017, with the headline 'Sorting out finances before 'I do''. Print Edition | Subscribe