Three months. That is all that’s left before this young banker couple’s dream of moving into their very first home is finally realized. Like most success stories, theirs isn’t a perfect narrative. A key thing they’ve always had going for them was shared knowledge, understanding, and appreciation for money matters.
Jed Urcia, 30, and Therese Torres-Urcia, 31, have been together as a couple for almost eight years. Both work at the Bank of the Philippine Islands (BPI): Jed as an investment counselor and Therese as a Campaign Manager in the Customer Relationship Management division (CRM).
Here are just some ways on how this banker couple has put their knowledge to practical use in their relationship:
Q: How were your individual financial habits when you were younger? Did these change over time?
Therese: Before we were married, I bought what I wanted when I wanted them. When we got married, I became more conscious of my spending as it was no longer just my money but also Jed’s. I have to consciously save for our future expenses. We currently maintain individual savings accounts and a joint checking account. We plan to open a joint savings account in the immediate future.
Jed: During the dating/courtship stage, it’s important to make a good impression, so I was a little more liberal with my money than usual. As the relationship progressed, the pressure to constantly impress gradually disappeared as we became more comfortable with each other.
Q: What are the major expenses of a newly married couple?
T: Jed initially expected us to live with his parents. Upon discussion, we both decided we needed to live separately from them to build our identity as a couple. And so while planning for our wedding, we decided on getting a condo. It was an unplanned major expense. Thankfully, our parents are generous, and they help us out financially every now and then.
Traveling together was one of the things I really looked forward to after we got married and, to fund our vacations, I usually save up for it, or we time our trips after we get our bonus.
J: After carefully considering my parents’ suggestion that we should maximize our company benefits ahead of the proposed excise tax on vehicles and gas, we decided to take out a loan for a newer, more fuel-efficient replacement and sell our 5-year old car (before it starts to become costly to maintain).
Q: Do you, as a banker couple, have core financial principles that you practice today/helps you in planning for future expenses/savings/investments?
T: We live within our means. We also make sure that when we travel, we have the budget for it. We don’t believe in taking out a loan for traveling. As much as possible, we pay our credit card debt in full every month. And of course, the cliché but still true equation of Income – Savings = Expenses.
J: We practice forced savings and make sure to invest. In investments, we think long-term and try not to touch it. Our investments are diversified across stocks, bonds, and cash instruments to achieve higher return but keep our investment risk manageable.
Q: As a banker what financial wisdom do you want to impart to fellow millennials? What financial habits should be adopted/dropped?
1. Credit cards
(Bad) Thinking of credit cards as free money or extra money.
(Good) Credit cards should be used to facilitate easier payment, but make sure you don’t spend beyond your capacity to pay. As much as possible, use your credit card only for purchases that you can otherwise afford to pay in cash. Having this mentality can help you avoid abusing it as an extension of your available funds.
(Bad) Saving only whatever is left of your salary. Also, it is wrong to think that investments and insurance are only for those who are already rich.
(Good) Time is your friend. The earlier you save/invest/get insured, the better. You can start early with a small amount and build it regularly.
3. Buying a car
(Bad) Don’t buy one unless you really need it because it is an expense and not an investment.
(Good) Take advantage of programs being offered by your company. Shop around for the best deals.
4. Buying a house/condo
(Bad) Rushing your decision and not doing enough research because buying a house/condo is one of the biggest purchases you’ll ever make.
(Good) If you can, consider buying a property while you’re still young and while you don’t have many responsibilities yet.
Good financial habits, like relationships, require discipline, hard work, deliberate effort, and unwavering commitment. And like in the example of Jed and Therese, starting early with sound decision making can help prepare millennials to succeed in life’s bigger responsibilities that lie ahead.