Family financial plan…what you need to do

Before you say “I do” or put a ring around her fourth finger, it is important that you give it a considerable thought. I do not mean your intention of getting married, but rather how you will spend, save and invest money in your marriage so you can at least achieve decent family financial success or freedom.

Although, hundreds of thousands are blinded by the love and the euphoria of the moment and do not take into consideration family financial matters. However, it is never too late to start giving it a thought and beyond the thought—start planning and implementing your family financial plan.

Family financial plan is the process or strategy on how you intend to spend, save and invest and grow yours and your partner’s money so you can achieve financial stability now and always. When it comes to family, there are myriads of spending (unnecessary spending too) to be done.

I believe you can figure out what these spendings are if you are married. If you are not, then have it at the back of your mind that it is nothing compare to what you know or had experienced, most especially if the money is coming from one partner.

And it is very easy for you and your partner  to be overwhelmed with this spending that you will completely forget the future and simply exist in the now, where the now do not give room for savings and investment.  This situation could lead to frustration and misunderstanding most especially when the children start coming and attention completely shifts away from you to them.

So before you become overwhelm with endless spending, here is what you need to do and if you are already neck dip into it; this is what you still need to do.

Step One: Have a financial meeting with your partner: if you are married or about to, the first thing you must build with your partner is communication; most especially on the issue of money management around the home. So, it is advisable that you have a good communication with your partner on financial matters.

The purpose of this financial meeting is to have an idea of how much is coming into the family. I know most Nigerian men are not comfortable exposing their monthly earning or income to their wives, but if you want to be financial successful, it is necessary that both parties know how much is coming into the family. So, have a discussion with your partner as regarding how much is coming into the family.

Step Two: Create a family wallet: I do not say create a joint account because this has been a controversial issue in marriages. However, it is important that you create a family wallet, which is a common pool of money from both parties.

At least, 30 percent of your earning and that of your partner should go into this pool. The remaining 20 percent gives room for both parties to achieve or explore each other’s vanity without consulting one another. Of course, a man wants to hang out in the club with friends or business associates while the woman, perhaps, wants to give herself a special treat visiting the spa or buying that red dress from an online shop.

Step Three: Introduce the money pie chart: 30 percent from both parties income makes the Family Wallet. Then, you will need to work with the Money Pie Chart.

The Chart is a simple systematic way of disbursing the money at hand at before making any spending. Forty  percent of this common pool should be allocated to monthly expenses.

This is where all the domestic spending in the home should come from. And of course, there should be a manager in charge—perhaps the wife.  Twenty percent savings can as well be seen as money for contingency. When you have used up the amount allocated to expenses, this saving can be a saving grace.

However, it is not an opportunity for you to quickly use up the month expenses allocation. This savings allocation should be controlled by the husband. 20 percent should go for investment. Both parties should decide what kind of investment platform is suitable for the family and should seek investment advice before investing. The last 20 percent should be a form of money you should invest in your child.

Depending on the agreement between both parties; it could either be a form of investment for the child or cater for the child’s education. Whatever decision is taking on this; make sure you start putting this strategy to work from the first month after your marriage ceremony and you won’t have to settle another financial dispute between you and your partner.  

Alfred Ade-Ijimakinwa