The happiness money buys you: Financial freedom as a couple
By Hoe I Yune, Sep 23, 2020
In the last story of our four-part “The Happiness Money Buys You” series, we speak with 33-year-old banker Sheena to find out why financial freedom as a couple is so important to her. On her personal Dayre account, Sheena has previously shared her thoughts on #dayrefinance and how she met 33-year-old software engineer Daniel at a church camp.
Sheena and Daniel started dating in 2016 and tied the knot in 2018. Sheena describes herself as the CFO in their marriage, a role she naturally fell into as she enjoys keeping track of finances.
At the start of every year, Sheena calculates their net worth, which is a combination of their bank balances, CPF, investments, savings and retirement plans, and property. She tries to predict growth for the next 12 months, which then allows her to budget their spending.
To Sheena, having money is a means to having freedom. It enables you to spend on something without worry, whether it’s a new bag, a travel experience or to gift others. If money can solve a problem — a personal one, a family emergency or to help the church out with their budget — it’s not a problem to her. It’s a mentality that she has carried from childhood into her marriage. Today, she shares why she believes in financial transparency and financial compatibility in a relationship, and the joy that financial freedom brings them as a couple.
My husband Daniel and I first broached the subject of money about a year into dating. I can’t remember exactly how it happened or who said something first, but I’ve always believed that as a couple, there should be no secrets. That means being able to discuss everything openly and honestly, including money matters.
When we got engaged, we combined our finances in a joint account. Some couples take a three-pot approach — my money, your money, and our money. But we agreed that we wouldn’t have felt comfortable with that because it would’ve felt as if we were keeping a secret from each other! What we did was pool all our money together in one pot.
How it started was I transferred money into his account and added my name to it, so it became our joint account. Whether we wanted to buy clothes, bags, accessories or gadgets for ourselves, we drew money from the same pot. We set a budget at the start of every year so we know how much we can spend as a couple, although it’s pretty fluid and we don’t restrict who is allowed to spend more. We trust each other to do what’s reasonable.
We now have more than one savings account, including separate bank accounts for the sake of convenience. However it’s still “one pot” in theory because we can spend from each other’s card or account and everything is managed as a whole. Everything is seen as belonging to the both of us and taken into consideration when planning for emergency funds and how to expand our family.
Daniel usually leaves the decision-making to me when it comes to movement in between bank accounts and I do whatever I can to maximise interest rates. I’m lucky that by nature of my occupation, I am always in touch with current trends and ways to manage money. If I find out through Dayre or work that interest rates at a particular bank are good, I would move some money over. If the interest rate becomes bad, I take it out.
Whatever I do is documented on an Excel sheet, which is a fuss-free way to keep track of what we have and our plans. I have different tabs for net worth, income, insurance and investments. He can check in on what I’m doing whenever he likes but he rarely does so.
Daniel isn’t as interested in working out the numbers, whereas I like the thrill of watching our net worth grow! It’s like levelling up in a game.
What really helps is that we’re pretty similar in terms of our priorities. Before splurging on big ticket items (anything over $1,000), we would discuss and ask, “Should we really do it?” and “What other alternatives do we have?"
A rare difference in opinion was when Daniel was keen on a car but I wasn’t completely convinced it was necessary. We went back and forth about it for roughly six months. In the end, I gave in because I knew it was important to him and that I would enjoy the convenience of owning one. In my mind, I treated it like an “experience” expense, reasoning that if I can spend $10,000 on a holiday for two, why not think of a car as justifiable in the same way?
To save costs, we bought a nine-year-old BMW for $31,000 last year and renewed the COE for $33,000 this year. So, we spent $64,000 on a car that could last us for 11 years. Daniel likes BMWs and believes that the older makes of BMWs are better made. We’re likely to spend more money on maintenance but overall, we reckon that it’ll work out to be less than buying a brand-new car. We also bought a 9-year-old one because in the event that it turns out to have a lot of problems, we can still deregister it before the 10-year mark and get the PARF rebate of around $20,000. So, our total depreciation cost would only be $11,000 for one year.
Right now, we’re discussing as to whether or not we should upgrade our MacBooks since they’re both coming to 10 years old. For weeks, we’ve been weighing the pros and cons of an iMac, Mac mini, and MacBook Pro. We’ve yet to settle on a cost-effective option that suits both our needs and can last us another 10 years, so we’re not rushing into it. I would probably be managing money the same way if I were single, and I know it’s largely because Daniel and I think alike.
We draw different salaries but as a couple, it’s not so much about having the same spending power; it’s about financial compatibility.
What’s the value of money to you and what are things you would prioritise when it comes to spending? Do you have more of a saver or spendthrift attitude? I’ve seen people with different attitudes, and I think it’s really important to have the same one as your significant other or to work out a compromise. Otherwise it’s bound to put a lot of strain on a relationship.
Someone might feel that money is meant to be spent and not save much, or perhaps they could be more relaxed about retirement savings, thinking that they can always hustle later. As a saver, I don’t think this mentality would sit well with me. No matter how much I enjoy life’s comforts and impulse buys.
It was pretty clear to me from the start that Daniel and I are similar in terms of how we value saving over splurging. If he had been working for the number of years that he had and had nothing to his name, I would’ve been worried. Instead, I noticed how deeply he thinks things through before making major purchases.
Although before we got married, he had an overly simplistic method towards budgeting. He had one simple rule, which was that if he really liked something that cost $2,000, he wouldn’t buy it right away. Instead he would make sure that his bank balance increased by double the amount ($4,000) first. So if he had $50,000 in his bank account and he was eyeing something that cost him $2,000, he would save up another $4,000 and have $54,000 before allowing himself to buy it. It’s a flawed approach because when I asked if he has a windfall of a million dollars of spare cash, does that mean he’ll spend half of it? He said yes, and that’s just not financially sound! I teased him about it.
I believe very strongly in setting up financial templates and budgets. If I get a hold of a million dollars, sure, I could spend $100,000 on a car, but then I would have to be financially savvy enough to save and invest the rest.
To manage my money well is a habit that kicked in during my second year of working. I realised I wasn’t saving much money because I was overindulging in things that I couldn’t afford in the past — a new laptop, LASIK eye surgery, and holiday trips.
The fear of not having enough money is real, and insecurity crept up when I noticed my dismal bank balance.
I pictured how much I wanted my net worth to grow by and did all that I could to make it come true in a year. It was heartening to watch the numbers grow and I began deriving joy not from purchases but by knowing that I was on track to hitting my target. I would say a good gauge is to have something like 12-months’ worth of monthly salary, then look into investments.
Since my fourth year of working, I’ve been earning a variable income, which is a further incentive to set aside a large amount of emergency fund. Right now, we save aggressively as the priority is making sure we have enough savings to tide us through anything, including budgeting for ageing parents and children we are planning to have.
There’s no fixed percentage in terms of how much we must save because what we do is keep our annual net worth growth goal in mind, then save and invest accordingly. But the ballpark figure for the past few years have been around 50 to 60 per cent.
Growing up, there were times when money was scarce in his family. It was similar for me. My careful attitude is one that was first inculcated in me as a child. After giving me my first allowance, my mum bought me a little notebook to record how much I saved and spent every week. Even if it was only a difference of $1 or $2, I’d see the numbers increase from there and feel a sense of satisfaction.
When I was 17, my parents got a divorce. My dad was in huge debt and our house got foreclosed; the bank repossessed our house after my parents could no longer pay the mortgage. I vividly remember my mum packing up and moving my brother and I to my aunt's home. We stayed with them for a bit, then rented a place for a year and a half before she could buy a new HDB, which she now still lives in.
My mum was a very good saver so we could get by without worrying about not having food on the table. When I secured a university scholarship, that was an icing on the cake and I worked part time while studying for my accounting degree, eager to kickstart my financial independence journey.
Seeing what happened to my parents and how my mum took care of us reinforced what she taught us all along and that was how important savings are. I never wanted losing a roof to ever happen to me again.
From experience, she advises that I should put aside my own money to protect myself in a marriage. Admittedly, I haven’t followed suit. It’s just a personal preference that I would rather go all in in my marriage than hide anything from my husband.
To me, what’s important is being aligned in terms of how my husband and I budget our money. Be it a by-product of my family, education degree or job, I find financial freedom in knowing how much I have and can afford to spend. I set a budget for everything, which came in handy when paying for our wedding and buying our first home.
Being able to see our combined net worth allowed me to know that we could afford a $1.2million resale condominium. We were both 31 and had been working for about seven to eight years by then. I considered the down payment and made sure we could make monthly payments without compromising on our quality of life and CPF.
When it came to wedding planning, I set a budget of $20,000 after collecting ang baos (red packets). You never know how much you’ll collect but we managed to keep it to only a little above $20,000 after collecting ang baos at the end of the day.
It also boils down to gut feel or financial sense — an inner mechanism that stops you if something is too expensive.
While I think the financial plans helped guide me, even before looking at the budget, my gut feel would kick in if I even considered expensive options. When I was looking at a popular videographer who would’ve charged $10,000, sense kicked in that it’s too expensive, so I found another for $3,000. If I were to spend $10,000 on a dress, I would’ve felt really guilty about it and not been able to follow through.
For every single wedding item, I went by what I liked the most, then considered what I thought made the most sense financially.
Budgeting definitely didn’t take away the happiness I felt on my wedding day. Instead, it alleviated the stress because I felt relaxed knowing that I did the sensible thing.
Finance talk doesn’t always have to be serious. For instance, we would update each other whenever we get salary increments. Although we don’t do anything special to celebrate, to be able to share the happy news with one another brings us joy.
My husband and I aren’t “gifts people” so we don’t buy each other anything for Christmas, anniversaries and birthdays unless we’re very sure we know what the other person wants. As recipients, we’re also very candid if we’re eyeing anything. It all started when we realised that he got really stressed whenever trying to think of what to get me and I also felt very stressed at the thought of spending money on something that he might not like.
Because of our faith, we see money as a blessing from God and so we need to use it wisely to take care of our families and help others.
That doesn’t mean we don’t enjoy treating ourselves. As a couple, we have enjoyed trips to Maldives, Turkey, New Zealand and South Africa in 2018 and 2019. We were meant to explore Central Asia (Uzbekistan, Kazakhstan, Kyrgyzstan) and Russia this year but those plans have been shelved due to COVID-19. So we did a staycation!
Our annual travelling budget is about $20,000 for the both of us and because we’re clear on this, it gives us a peace of mind to enjoy ourselves. Exploring new places is a priority for us right now, although we will probably dial back if we have children.
I also enjoy beauty treatments and shopping for bags and clothes. I don’t specifically save for items but because I set aside a budget at the beginning of the year, I know what’s within my budget and if I can afford to spend and not save on something.
Having a “savers” mentality doesn’t mean you can’t enjoy the finer things in life. What gives us happiness is knowing that we’re on top of our finances and where we stand financially. Once we’ve set aside investments, emergency funds, and know that what we spend won’t hold us back from hitting the annual net worth goals we’ve projected, we feel confident about spending. Through being organised, we know we can spend freely without jeopardising our financial state. It’s what keeps us comfortable and happy.
My name is I Yune, and you can find me at @i_yune on the Dayre app. On my personal account, I document how I strive to stick to savings goals and my thoughts on money matters in a relationship.
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