Financial Planning for the Future

A few days ago, I uploaded a picture of a completed board I made with my husband, which I’ll call our Savings Board. It’s basically a breakdown of all the major things we’re saving up for, plus one aspect of paying back his PTPTN loan which, if we can quicken the payback process, we will.

Anyway, as a counselling graduate in family counselling, I am reminded of when I had to counsel couples and many cases I had to deal with were on finances. In fact, I’d say around 50% of the cases I managed had some sort of thing to do with the financial situation of the couple, and this is especially true for younger couples.

Let me be very frank: It’s incredibly important to have a discussion about money either before marriage, or right after marriage. Especially on what debts you have, how much income you have, and to an extent, what savings you have.

In this day and age, I disagree with the notion of “My money is my money, his money is my money”. At the end of the day, you’re relying on your husband to bring you to Jannah. And with the current economic situation and ridiculously high costs of living, it’s just not fair to expect the husband to support everything. There needs to be an element of give and take to make it work.

So, back to counselling. There needs to be a level of openness between both husband and wife to talk about money matters. And this my husband and I talked about pretty much right after we got married, leading to finally the creation of the Savings Board that we did a few days ago.

So here was our process.

1. First, we talked about our debts, probably within the first two months of marriage. Whether we owed anyone any money, what loans we have taken, how much longer it would take to pay off those loans, and how much income we make.

2. Track down the monthly expenses. How much is the rent? Car loan? Phone bills? Water and electricity bills? (So far, ten months into marriage, our water and electricity bills have been zero. I’ll write about saving tips next time πŸ˜„). How much for gas and Touch and Go? How much did we want to save a month?

Remember this: Salary – Expenses – Savings = What You Can Spend.

Not this: Salary – Expenses – Spending = Save what’s left over.

3. Over the next few months track down whether you’ve gotten the maths right. Are you spending too much, and can you save more? Or do you need to save a bit less because you underestimated the monthly spending? Fine-tune this as you go, as your income will also change with time.

4. Fun part: Create a vision board. I’m not joking. My husband and I created one using a mounting board, which we pinned up in our living room. So we have all our targets and pictures there. When we want our first house. When we want to go for Hajj. When we’ll go for our first overseas holiday. What kind of imported car we want. Vision boards are a great way to make you feel positive and happy, and to redirect your energy towards positive actions you can start taking now.

5. Create a Savings Board. Once you have your goals on your vision board, now you can finally plan how to save up for it. πŸ˜€ Creating a savings board is easy. First, pick out the top things you want to save up for, depending also on how much you can save in a month.

For me and my husband, the things we want to really start saving up for is our house downpayment and my laser eye treatment. So taking the laser eye treatment as an example, first find out how much you need to save for it (RM7000). Divide that by how much you want to save a month for it minimum (RM100) and the number you get is the amount of time it would take (70 months / 5 years 10 months), which is also the number of boxes to print out. It’s as simple as that. πŸ˜€

Some things to point out also:

1) The first priority is to have an emergency savings. Ideally, this should be three to six months of your monthly expenses that you will never touch, used only for emergencies.

2) My husband and I also have savings for ad-hoc things. Like for servicing the car, holidays. This must be separate from your emergency savings.

3) Your savings board can be for something big, like a downpayment for a house, or for something small like saving RM1000 to buy a fridge or freezer. The idea is to keep you motivated to save whatever extra you have to reach your goal faster and track your progress.

4) For things you’ve saved up for the long-term, put it where it can grow. Our savings for the house downpayment and for Hajj are going into our Tabung Haji accounts.

5) Ideally, have different savings accounts for different things. Just so you don’t cheat or mix things up.

Happy saving!

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