Thread by @theBuoyantMan

95% of educated people marriages break because of financial incompatibility.

Some tips on financial compatibility and running a family financially.

1. Budget properly, every month.

Use the envelope method. Make budget each month for several components - leisure, groceries, travel, fuel, metro, movies, subscriptions, eating out, etc., whatever components you want to have in your budgets, create separate envelopes.

According to your budget every month, allocate cash to each component.

If both spouses are earning, pitch in equal amount of money into a joint account, and use that for the envelopes created above.

2. Have two accounts for the amount outside of the joint account - from what you earn. An account your spouse would know. An account nobody knows about. The account nobody knows - use it for right purposes, but to keep money away from being spent.

The account you and your spouse both know, of the rest of your salary and income, use it for investments in your name (maybe have your spouse as nominee) and for your independent spending.

3. If you ask your spouse for any amount as a loan (especially if you're a man asking money from the wife) return it to her as early as possible, at the earliest possible. Try not to ask any money from your wife or her parents and avoid putting yourself in such situations.

This may be a bit too patriarchial. But, ego issues crop up due to this, and if your wife keeps asking you for money back (since men are a bit relaxed about money with family and give back leisurely and women are strict about money and demand right away), it leads to bitterness.

So, as a thumb rule, never ask for even chump change from your wife and especially not her parents. The society has been built upon women receiving money from their husbands and usually unconditionally, and the converse hasn't become that prevalent yet.

4. To avoid this from happening, always have a wallet or a safe or something to have cash ready to go for any purpose. Don't depend on others for big ticket purchases or small every day spendings. If your wife asks for money for a valid reason, give her, and don't ask back.

Keep track of every major expense on an excel sheet, and account for it in respective accounts each month. One of the ways to build financial accountability is to keep separation of concern a main priority with accounts.

This means, whatever money goes into deposits - don't get broken until maturity. Whatever money goes into mutual funds don't get prematurely withdrawn. Plan finances accordingly and make sure the amount you invest is amount you should not touch until the investment expiry.

5. Always try to be in a position where you can give loan to others. But never lend anyone money you can't afford to lose.

As a good practice, it's better to neither lend money to someone else nor receive a loan from someone else for personal purpose.

6. There's no dishonor in downgrading your lifestyle momentarily. But to avoid such a situation, don't upgrade your lifestyle too quickly alongside upgrade in income. Upgrade your lifestyle maybe 1.5-2x when your income grows 10x.

You have to live in such a way that even if you lose your job tomorrow, or if you take a 70% pay cut for next 1 year, your lifestyle won't get affected. That's the most prudent way of living. Keep upgrading lifestyle proportional to income, you will suffer sooner or later.

7. Apart from the joint account that both you and your spouse pitch in equally (when both of you are working), don't ask any money from your spouse from her personal account, and if she asks you, be ready to offer, but within your personal capacity.

8. When kids happen, have another joint account for kids education and expenses - which you can pitch in proportional to your salaries. If similar salaries, equal amounts pitched in would work. In your personal capacity, you can spend whatever you want for the kids.

9. Outside of this, if you're a man, be a provider. Despite the line thinning between men and women with traditional gender roles, the society still saves women and children first, and men are still expected to be providers of financial, physical, emotional security.

10. Whatever you put into savings, don't break the habit for any reason - unless there's an extraordinary circumstance that requires it. It's easier to break savings and use that money for travel or buying a car/gadget, but don't do that.