Saturday, 26 July 2014

For Richer, For Poorer?

For Richer, For Poorer?

Do you hide a secret stash of money away, unknown to your spouse?  Or understate the amount that you spent on your credit card?  Well, there’s a term for that: Financial Infidelity.   It’s to describe any secretive act of spending, holding money or even incurring debt, with the intent to hide it from one’s partner or spouse.

I’ve come across that term from a book sometime back but only recalled it recently when I read a small but interesting news report.  The report spoke of a lucky man from Taiwan who won NT3 million in prize money, but specifically asked that the lottery company keep his win a secret from his wife!  The company went on to add that this was not an isolated case.  There had been seven winners, including women, who had asked to do the same. They’re just the exceptions, I thought at first.  But later, on reflection, I realized that this is indeed a sad but true fact of life for quite a number of couples I know, albeit on a much smaller scale…

There was this friend who shared how she had sold some wedding jewellery and decided to keep the cash in a secret stash.  Yet another was bemoaning how tough but necessary it was to under-declare to her husband the amount she spent on a particular high-ticket item.   What really puzzles me sometimes is why they could confess their doings to us mere friends or acquaintances, yet found it difficult to face their significant others?

And this is happening not just among females. In Shanghai where we used to stay, it is a tradition for wives to hold the purse strings with full access to their spouses’ accounts.  In some companies, some male workers would request that their bonuses be paid in cash and not through their usual bank accounts, so that their wives could not find out.  One way to circumvent the family CFO!

There are many reasons for financial infidelity: an overly-stingy spouse, a spouse who nags too much or “my mother kept a stash away too”.  Under certain rare instances, I suppose, the reasons could be valid.   However, I am personally strongly against it.  It may start small but small things do add up, leading to an erosion of trust and confidence in each other.

In the States, financial infidelity is reported to be a rising trend and the cause for 16 per cent of divorces. Luckily, there are ready experts who have written great books on how to deal with this already.  If you’ve the time and the interest, do zoom in on the following books, which I have handpicked  – from where else… our trusty library of course:
1)   Financial Infidelity: Seven Steps to Conquering the the #1 Relationship Wrecker, by Bonnie Eaker Weil
2)   Financial Bliss: A Couple’s Guide to Merging Money Styles and Building a Rich Life Together, by Bambi Holzer
3)   Financially Ever After: The Couples’ Guide to Managing Money, by Jeff D. Opdyke
4)   Women, Men & Money: The Four Keys to Using Money to Nourish Your Relationship, Bankbook and Soul, by William Francis Devine, Jr.

Speaking from personal experience, I can say my marriage has not only enriched me spiritually, mentally but financially as well.  My conclusion: marriage and money can and should mix.  I am no expert on how to help couples sort out their financial issues and problems but can only share the following “quote” from which the heading for this blog entry came from:

I take you to be my lawfully wedded spouse, to have and to hold, from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, until death do us part.”

I sincerely wish you a financially blissful marriage!

(This article first appeared in CPF IM$avvy Bloggers' Corner.)

Thursday, 24 July 2014

Taking the emotion out of buying your dream home

When I buy stocks, I find myself unattached emotionally to the share or the company.  It’s generally easy to buy, hold or sell and costs are transparent.

However, things are not the same when it comes to hunting for our property.  After all, it’s going to be our home for years to come.  We are going to sleep in it, eat in it and share many of our family memories in it, for years.    We have to love it, or at the very least, like it.  Therein, I think, lies the pitfall of many a property buyer. 

We become too emotionally invested in it, so much so that we fail to dissect the property and see it as it really is - a consumer item which has its costs and benefits attached.  It’s also probably one of the most expensive items you will ever buy in your lifetime, yet the way we approach it seems to be a little cavalier.

My husband and I bought a private property many years back just before the property market went downhill.  It was, on hindsight, an emotionally-swayed one although we didn’t see it as such during those heady property times.  Property prices were rising and we could not see how we could afford a property in the future if we were to “miss the boat”. 

Just then, my husband’s colleague had also bought a newly-launched property in the east and he was one of the few astute investors we knew back then. Surely, we thought, he must be doing this for a good reason. So, after vewing the showroom twice, we bought a unit there. High floor, no pool view and no west sun.  We waited for the TOP while still staying in our own flat.   Frankly, we weren’t sure whether we would shift in or rent it out.  Our goals were not clear.   We just knew we had to get one, well, because everyone else seems to be doing it or thinking of it.

To cut a long story short, we ended up renting it out as we still needed to stay near our in-laws who were taking care of our young children.   As the market slowly went downhill and hit by a double whammy of a slowing economy and rising interest rates, we saw our home loan instalments going up but our rental stayed the same.  The colleague sold his unit at a good price but ours took a long time to get any offers.  Later, we realised, buyers seem to love pool views and our unit was, in some buyers’ opinions, at a rather high floor.  We finally sold it at a loss.

It was a painful lesson. A lesson, I hope, readers like yourselves will learn from too.   The learnings we gleaned from it were priceless though.  Now, my husband and I steer clear of emotions when we talk about property purchases.  To avoid history repeating itself, we decided we will zoom in specifically on resale units where you can at least touch and feel the “product” instead of visualising it from some glossy marketing brochure.

These are some things we do to take the emotion out of our home hunting:

1)   Discuss and agree on the “must-haves” and “nice-to-haves” in the property you want before you even step into any viewing.  This clears your mind as to what it is you are really looking for in your property.  Hopefully, it also lessens the amount of friction between husband and wife when it comes to selecting your dream home.

2)   Check out URA transacted prices, maintenance fees, any impending sinking fund top-ups etc which involve your own outlays

3)   View as many units as available.  I cannot overstate this. I now keep a file, no – two files - of all the units we have viewed with scribbled notes.   

4)   View the property in the day and evening time, taking note of the sun, noise and traffic conditions.

5)   Never fall for “preview” pressure tactics or agent “counter-offer” tricks.

6)   Be ready to walk away from a deal.  There will always be a good one.  Patience shall be rewarded.