All About Relationships

For a couple, finance is one of the most frequent topic, and where arguments usually occur, unless they are extremely wealthy. In the seminar that I recently attended, there was a short section on how a couple could attain financial freedom and it has an example on the method.

The idea is to separate your income into 6 different accounts. They are Financial Freedom Account (FFA), Long Term Savings for Spending Account (LTSS), Education Account (EDUC), Necessity Account (NEC), Play Account (PLAY) and Give Account (GIVE). All money in the accounts, except the FFA, will be spent. The FFA is considered the goose that lays the golden eggs and will grow bigger to provide for your lifestyle, which in turns gives you your financial freedom. The contribution to each of these 6 accounts are; 10% FFA, 10% LTSS, 10% EDUC, 55% NEC, 10% PLAY & 5% GIVE.

For a couple, the contribution needs to be slightly different as each individual should also have a personal set of accounts. The example given by the seminar is as follows: (Note: As there might be some infringement to the seminar contents, I have changed the names)

Basically, it says that with the combined income, take out a small but equal portion for personal FFA, LTSS, EDUC and PLAY usage. These amounts serves as the personal accounts for the 2 individuals. For the rest of the money, it would be split in the proportion as stated in the earlier section, with 6 accounts.

I do not agree with this structure for a couple as I do not think that is is fair to the person who is earning more. I do however agree with the proportion and the need of such accounts. My method is opposite of that you see above. Mine would be to split the joint accounts 1st before the personal accounts. I feel that as a couple, the finance of the couple as a whole should be more important than the individual finance. Thus, priority should be given to the couple’s path to financial freedom. With the same example, my numbers are like as shown below:

The above is only an illustration on how a couple can slowly attain financial freedom. One can slowly fine tune the percentages to suit his or her current situations. With such a financial plan, I do believe that the couple would be better prepared and would be better off financially for years to come.