By Francis Eweherido
Separate or Joint Accounts — Should couples have joint or separate bank accounts? This is a question I get asked often. I know some couples who operate joint bank accounts smoothly and they seem to have mastered the act. I do not have joint accounts with my wife, although we have access to each other’s money, including ATM and debit cards.
Even though I believe firmly that “you are no longer two but one”, I feel that couples have specific needs and require some breathing space to operate. Separate accounts (without prejudice to joint accounts) give them the much needed space. Also spouses come from varying backgrounds with peculiar needs and they should, if they agree to, be able to sort out their extended families without necessarily involving their spouses, provided it is not to the detriment of their immediate families.
Ability to handle tensions that arise from financial issues vary from one couple to the other and newly-weds should know their ability before deciding the account type they want to operate. What I consider most important in family finances is cooperation, openness and sincerity. Once these elements are present, account type becomes superfluous.
But this openness I am championing here is like common sense that is not really common. There is a multinational company where the members of staff are told, unofficially, not to disclose to their spouses (next of kin) how much they stand to get should they die in service. Why? The amount is mind-boggling and their spouses might be tempted to eliminate them.
In another company, recently, the husband went to demand the wife’s entitlements while she was still alive though in a critical condition. She eventually died. Was he responsible for the wife’s death? I do not know. I also have a friend who keeps sealed lips when he “hammers” (makes a lot of money). “My wife can go through a ton of dollars in a twinkle of an eye”, he says.
So, if you are in the shoes of all the above, what will you do? Will you be open? My final take here is that couples should do what suits their circumstances, but their actions should be devoid of malice and selfishness. Newly-weds should, of necessity, designate a next of kin in important financial transactions and investments. Unless circumstances necessitate otherwise, one’s next of kin should be one’s spouse.
Delaying Gratification: All things being equal, the financial power of newly-weds increases when they pull resources together as against when it was just the guy or the lady. So what do you do with this your new-found financial strength? You might decide to upgrade your accommodation, means of transportation, go on vacations, habitually eat out in expensive restaurants or generally embrace a hedonistic lifestyle.
This is called instant gratification. On the other hand, you can maintain the status quo and use your new financial strength to lay a foundation for the future. This can be in the form of investments in property, money market instruments, expanding your existing business or going into new businesses. It is called you delayed gratification. Remember marriage is a marathon, not a sprint.
Watch your expenditure: It is an open secret that every rich man watches his expenditure, no matter how much he spends. Otherwise, he will go bankrupt no matter how rich he is. Newly-weds, too, must watch their expenditure. Here are some of the ways you can do it.
You should plan and have a budget— weekly, monthly or yearly- whatever is convenient for you. Having a budget is not enough, you should work with it. That is fiscal discipline and includes avoiding impulse buying; that is, buying without prior planning. I often advise my marriage class participants that the only impulse buying they should engage in are low-involvement items like sweets, small packs of biscuits, razor blades and others that cost less than N50.
These will not do damage to any good economy, especially if it is not habitual. Once items come in thousands of naira or more, plan and put them in a budget.
Also become a bargain hunter. It does not hurt. Rather you save loads of cash on the long run. In addition, do not fritter your money away.
I am not suggesting you become a slave to money, but learn to value money. If you are the type who always carries only N1000 or N500 denominations, chances are you frittering away money, because when you purchase items you really need and the seller has no change, you will forgo the balance of your money. Some people mistake such frittering away of money for charity. Charity is planned, systematic giving and it is good; frittering is wasteful, purposeless and dangerous when it becomes habitual.
Newly-weds need to get their priorities right. There is no sense in spending tons of money on your child’s first birthday when the child does not have a children’s bank account or an educational endowment insurance policy. These should come first and all the cash the baby got at birth should go into his bank account or insurance policy as premium payments.
In secondary school, we studied about “needs” and “wants” in economics; stick to your needs. Be fashionable, but also be wary of fashion trends, because they can dig a big hole in your pocket. Also, be wary of buying on credit. Whether you are paying in August or September, the bottom line is that you will pay someday.
Finally, do not develop habits you cannot sustain financially. Sometimes, we get a windfall and “levels” change. We conveniently forget that windfalls are not regular income but occasional occurrences. Your regular income, not windfalls, should determine your “levels”. Financial matters have ruined many marriages; handle your finances with care.