Managing Household Finances as a Couple

 

When it comes to splitting household bills—be it utilities, groceries, or dining out—every couple has their own approach. Some prefer the “AA” method, where both partners share costs equally. Others might have one partner covering all the expenses, while some choose to pool their finances into a shared account.

In my case, since both my wife and I are working, we’ve opted for the shared account method. This approach has worked well for us, and here’s how we’ve structured it:

Account 1: Savings and Major Expenses

This account is reserved for significant financial commitments, including:

1. Big-ticket spending: Renovations, vacations, or any irregular, large-scale expenses

2. Savings: Remaining funds go toward building a financial safety net for the future.

We only dip into this account for major, planned expenditures, ensuring our long-term goals remain intact.

Account 2: Daily Expenses

This account takes care of our everyday expenses, such as:

1. Meals and dining out.

2. Groceries.

3. Utilities and other recurring monthly bills.

The practical side of this setup works like this: when either of us pays for something (like groceries or dining out) using a personal card, we immediately reimburse the amount from this shared account. This ensures all day-to-day costs are managed equitably and without delay.

Why This Method Works for Us

We’ve found our shared account method effective for several reasons:

1. Eliminates budgeting conflicts: Both of us have full visibility into these accounts, making disagreements over spending decisions nearly non-existent.

2. Encourages shared responsibility: Contributing equally fosters a sense of teamwork and mutual respect. We agreed on a shared percentage of monthly salary for the contribution.
   

3. Avoids guilt or overthinking: Whether it’s splurging on a nice dinner or buying premium groceries, there’s no hesitation—every purchase feels fair and transparent.

4. Your money is still your money: Whatever is not contributed to these two accounts remains our own money. There’s no need for "私房钱" (secret stashes).
   

By maintaining a clear and organized financial structure, we’ve been able to reduce stress around money and focus on what truly matters—our relationship and goals.

What About You?

How do you and your partner manage your household expenses? Feel free to share your methods or tips—it’s always interesting to hear different approaches!

 

 

Securing My Child’s Financial Independence Early

 

Having a child in Singapore comes with a surprising number of financial benefits, thanks to government policies that help kickstart savings for your little one. With programs like the Baby Bonus CDA and cash gifts, parents are given a head start in building their children’s financial future.

For me, I’ve chosen not to touch the Baby Bonus CDA or the cash gift provided by the government. I see these as my child’s money, meant to support their future rather than our present needs. Since I’m fortunate enough to afford the necessities, I’ve left the CDA untouched to compound over time since I am unable to touch them anway. Meanwhile, I’ve invested the cash gifts in low-risk instruments to preserve and grow their value steadily.

Why Build a Fund for My Son’s 20s?

Traditionally, the older generation believed their children would eventually inherit their assets. While this is true, the timing of such an inheritance might not be ideal. Assuming I live into my 80s or 90s, my children could only inherit these assets in their 50s or 60s. While receiving a lump sum at that age is helpful, accessing a financial boost in their 20s, 30s, or even 40s can have a transformative impact.

My plan is to unlock this fund for my kids when they reach their twenties—a time when financial support can significantly shape their opportunities, whether it’s pursuing education, starting a business, or making their first major investment.

Why Low-Risk Investments?

The advantage of starting this fund early is the sheer amount of time it has to grow, even in low-risk investments. Unlike an adult who begins investing around age 25, my son’s financial journey started the moment he was born.

For instance, even placing the funds in a GXS savings account earning 2.68% annually would double the money in about 26.7 years using the Rule of 72. That’s without considering other low-risk investment options or changes in interest rates. This example highlights the power of compounding, which becomes even more effective over a long horizon. By the time my son reaches his twenties, this fund could grow substantially—all with minimal risk.

The Composition of the Fund

This “fund” consists of:

• Baby Bonus Cash Gift: About $11,000 over 6.5 years.
• Ang Bao Money (until K2): All red packet money received until kindergarten.
  

By the time they turn seven, each child will have at least $15,000 in their fund—even if I had simply stored the money in a biscuit tin. After this point, no additional funds will be injected into the account, apart from the investment income it generates.

Once my children complete kindergarten, I plan to introduce them to the basics of financial literacy. Starting in primary school, they will take responsibility for managing their own pocket money and ang bao money, learning the importance of budgeting and saving. From age seven onward, the account balance they see and manage will only reflect the funds accumulated from that point forward. I do not intend to inform them about the assets accrued prior to their seventh birthday.

My Current Investment Strategy

To manage this fund, I’ve created a T-bill ladder and allocated spare cash to daily interest-yielding savings accounts. These low-risk options provide consistent returns and protect the principal, ensuring the money grows without exposure to much market volatility.

Since this money belongs to them, I’ve decided against placing it in high-risk investments like the stock market. While the potential returns could be 3x or 4x higher, the accompanying risk isn’t something I’m willing to take with their money. My goal is preservation and steady growth, not speculation.

Conclusion

While high-risk investments like the stock market or S&P 500 could yield greater returns, the possibility of a downturn or market crash makes them unsuitable for my children’s money. Managing their funds responsibly means prioritizing safety over speculation—it’s not my money to risk.

Building a substantial, secure fund for my kids’ future is a long-term commitment. By leveraging the power of compounding and low-risk investments, I’m ensuring they’ll have a financial foundation to support their dreams in their twenties—a foundation that’s been growing since day one