Tying the financial knot after saying 'I do'

Tying the financial knot after saying 'I do'
Starting early: Choong Jern Khang (right) and his wife Soo Phik Joo have set their financial goals as a couple.

When it comes to money matters, newly-weds software project manager Choong Jern Khang and test engineer Soo Phik Joo are certainly not starry-eyed.

From the beginning, they understood that marriage is also a financial union. They have discussed their priorities and goals, and are both on the same page.

For starters, the couple have agreed to delay starting a family till they are more financially stable. At 27, they both want to focus on their careers.

"Having children is not our top priority now. We are hoping to travel more and be financially stable before settling down to family life," said Choong.

Like Choong and Soo, newly-weds IT consultant Sunnil Mohanadas, 32, and biomedical science graduate Hema Priya, 28, are also not in a hurry to have children.

"Children would be our priority later in life. Right now, we just want to spend time with each other to catch up on all the time we have lost," said Hema who was in a long distance relationship with Sunnil for two years before tying the knot in November last year.

When they tied the knot, Choong and Soo had to make the transition from planning their finances individually to doing it as a couple.

"We need mutual trust and agreement when it comes to planning and discussing our finances together. We also have to be open and honest about our finances and not keep any secrets," says Choong.

Financial experts recommend that newly-wed couples sit down and discuss their finances, including disclosing each other's financial commitments and debts.

"It is a good thing that we are financially compatible. We agree on our ideas and plans for our future and share similar financial management styles," adds Choong.

Sunnil and Hema say they are working on their financial compatibility, but it is not a huge issue in their relationship.

"Hema likes shopping more than me, but it doesn't really bother me as long as she knows how to save.

"It was easy planning our finances as individuals. But now there are additional expenses which we have to take care of together. So, Hema and I would discuss and set up a budget for the big expenses, but not the small expenses," shares Sunnil.

Both couples are also fortunate because they share similar values with their partners on money.

They believe in spending prudently, saving for a rainy day and investing wisely.

Choong and Soo use a 60:40 formula in managing their money - 60% on needs and 40% on savings and entertainment.

"We spend 60% of our income on fixed commitments like house and car loans and living costs, and the other 40% on entertainment and savings," says Choong who stresses that it takes discipline to save.

Sunnil is so determined to save that he put half his salary into a separate account. The other half of the couple's income is used for their daily expenses.

"It's not hard for us to save as we are not excessive spenders. We spend when we travel, and even then do not spend on extravagant hotels," says Sunnil.

With GST kicking in this April, both couples are prepared to make the necessary cuts in their spending.

Choong and Soo say they'd probably cut down on entertainment, and Sunnil and Hema add they will eat out less.

Choong and Soo are not wasting their youth; they think it's not too early to start getting on the right financial track and setting their goals together.

So, apart from their day jobs, Choong and Soo have also taken on part time work to earn more. Choong tutors students in the evenings, and Soo teaches Mandarin and piano.

They are working hard, says Choong, because they are not merely aiming for financial stability. They want to attain financial freedom by their 40s.

"We hope to achieve financial stability as soon as possible and financial freedom by the time we are 40 years old.

"We use the S.M.A.R.T. approach - our goals are specific, measurable, attainable, realistic and time-specific ," says Choong.

The couple is also hoping to start a small business one day and invest in properties to achieve their goal of financial freedom.

Choong and Soo also believe in growing their money.

"We are saving up more money while looking for suitable investment options. We will most probably invest in low risk funds.

"We see investments as a long term plan, but would prefer those that give us flexibility and do not freeze up our cash flow," adds Choong who is not keen on putting his money in the share market as he perceives it to be risky and volatile.

Sunnil says he is also not a risk taker.

"We would put our money in mutual funds and fixed deposits, but not the stock market because it is a very risky game to play."

"We are also open to trying out unfixed deposits as it gives us the option to withdraw the money for an emergency. We would most probably invest jointly as the returns would be higher."

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