For some people, money is still a taboo topic — it’s a super serious issue they just aren’t comfortable talking about. And that’s totally understandable. After all, money has divided families and jarred relationships. It’s even started wars! Love it or loathe it, have too much or too little of it, one thing is certain: money is the cold, hard currency that defines much of the way we live. So it makes good sense to talk about it, especially in relationships. Right?
It’s essential to have an open and honest dialogue about finances, as there will be issues about money you need to work through as half of a couple. One person might earn far more than the other or have more assets. Some couples can also have different attitudes and values around money, as well as different spending habits. It’s important to get clear.
In intimate relationships money can impact so many things, especially self-esteem. Lea Schodel, CEO and founder of Wealthy, the Mindful Wealth movement, says there are many big issues around money in relationships. “Money brings up a lot of shame and guilt in relationships. Often people don’t disclose their full financial position because they’re worried about being judged, or they’re embarrassed,” she says.
Times are changing
In the past half-century, the concept of “breadwinner” has changed significantly. In the past, many women often worked until they married and taking care of bills was a predominantly male domain. How times have changed, indeed.
These days, men and women both bring home the bacon and, while the glass ceiling for female wages hasn’t been smashed completely, the cracks are definitely there. The gender pay gap is still hovering at just above 14 per cent. But overall, compared to previous generations, women are earning more, working for longer and more women are returning to work after having kids. Many more men are opting to be stay-at-home dads (current figures by the Australian Institute of Family Studies shows a humble 4 per cent) and both sexes are doing mature-age study, so dropping of fthe financial grid for a while.
You are worth more than money
Each person contributes to a loving relationship. Financial experts agree that if one person is earning more, that shouldn’t mean the other doesn’t have equal say in how income is spent, saved and managed.
Regardless of who has what, Lea says it’s vital to remember that people should never be defined by their net worth. Obviously. “How much money you earn does not equate to the value that you bring to the relationship,” she says.
What’s your money attitude?
How individuals think and act around money is one of the biggest issues that create conflict in relationships. One partner might love to splash cash about, but the other watches every penny and goes through receipts with a fine tooth comb.
Graham Smith, Chair of the Financial Counsellor’s Association of NSW says everyone has their own spending style and attitude to money. “It’s often learnt from your parents. If they liked to spend, your money values are likely to be similar,” he says. “And if they diligently saved up for purchases, you’ll probably have that same mindset.”
It’s a date
Regardless of your spending style, it’s really important to work together and talk about it. It might not seem very romantic to make a date with your partner to discuss money, but it can help you to focus on shared financial goals so you can talk about what you’re planning and working towards and look at ways you can manage things better together.
Fiona Bennett, a counsellor from Relationships Australia (WA), says going into your money discussions with an enquiring mind is a good way to get the ball rolling. “Being curious about what the other person wants and why they want it, as your starting point, can be really helpful,” she says. “You’ll often find some common ground you weren’t expecting — and other solutions might become available because of that.”
Fiona says each person has a different perspective on and way of looking at money. “Generally, money means one of three things: security, success or freedom,” she says. Ask your partner which one of those things money means to them — no judgement. It just allows you to see the other person’s perspective.
Listening to the other person during money discussions is important. It doesn’t mean you have to agree, but Fiona says acknowledging their perspective shows value and respect.“Otherwise, you’re just coming from your own point of view and banging on about that. The other person can’t hear it because they’re banging on about theirs,”she says.
If things are getting heated, take a step back and re-engage when you’re both feeling calm. Have a regular money date to discuss how you’re feeling and ways you can tweak your expenditure if money is going out faster than it’s coming in.
Devise a money plan. For some, this could be adding up all the bills for the year and putting that amount aside week by week so the bills are covered. It’s really up to each couple to determine what might work for them. Lea says, when working out a plan, focus on the positives and what you can work towards. “It’s important to remember money is an enabler, a tool to create a life well lived. Planning wisely with it helps to create a shared vision of your life together,” she says.
When working out a spending plan with your other half, it’s also a good idea to nominate an amount of discretionary income you can both spend on whatever you like. Lea says a good money plan looks at now versus the future. “While we’re always planning and looking forward to paying off debt, you need to balance it with living in the moment, otherwise you feel restricted and that can bring resentment into the relationship,” she says.
Yours, mine & ours
Taking care of finances is often delegated to just one person, which, of course, can be unfair if things don’t go according to plan. Graham says accountability to pay bills on time and to balance expenditure and savings should be a joint venture. “By sharing the task both partners know what comes in and goes out in terms of bills,expenditure and savings,” he says.
But, of course, cash isn’t the only means of acquiring things people want. The age-old concept of bartering still exists, but a much bigger player emerging in the new millennium is credit. Credit is part of the way we live, with credit cards, Afterpay and other services that provide easy access to things we’d like to have right now and pay for later — many with accrued interest.
Graham says there’s no escaping the concept of credit. “Our society is built on it — you do need a credit card, but not five or six,” he says. “If you are coming into a relationship and you have multiple credit cards, pay them down and get rid of them so you have one card each.” That sounds doable.
When managing credit cards,it’s also important not to withdraw money from one credit card to pay a payment on another. “That just becomes a perpetual and vicious cycle of debt,” he adds.
If things don’t work out
Being across the financial aspects of a relationship can potentially save a lot of heartache, especially if the relationship doesn’t go the distance. There are potential pitfalls you need to watch for. If you sign documents your partner presents to you and don’tread them properly, you’re still liable for whatever debt you’ve put your signature on. The law says ignorance is no excuse. Ouch.
Relationships can also mean shared debts. You aren’t responsible for debts incurred before you met. However, if you’re a co-borrower in a mortgage or have shared credit cards, you are. And despite common belief, you aren’t just liable for half the debt. The lender can pursue you and your partner for repayments until the entire debt is paid. Be careful, folks!
The big money mistakescouples make
Spending lies and secret debt
Financial infidelity breeds alack of trust that erodes relationships. If you discover your partner has hidden debt, it’s important to bring it out into the open and seek the guidance of a financial counsellor if you need to, to get back on track.
Graham says hidden spending tends to be an issue when one person has a habit. “Gambling, particularly online gambling, is definitely one of the big ones; and other issues like excessive drinking or illegal drugs,” he says.
To avoid it: Take turns managing money and bills so your shared finances are transparent to you both.
Not talking about money
Working towards shared monetary goals brings financial rewards. Lea encourages having regular chats about money. “It allows you to gain clarity and awareness, helping to guide bigger life decisions like, for example, whether you’ll take that job promotion,” she says.
To avoid it: Get on the same page about money. Work out together what you want your money to do for you and what sacrifices you’re prepared to make in order for that to happen. That’s teamwork!
Not enough insurance & not having a will
People insure their cars, homes and pets, but often income protection is something that’s overlooked. Do you have adequate insurance so you and/or your partner would be OK if you couldn’t work because of an injury?
The other issue is having a detailed up-to-date will or, in fact, any will at all. A joint 2015 research project by the University of Queensland, Queensland University of Technology and Victoria University showed that only 59 per cent of Australians have a will.
To avoid it: Plan a money date night (try and make it romantic), discuss your wishes and get the ball rolling with the professionals.
Income insecurity
Fear around earnings and income is a big issue for many. Current unemployment rates stand at 5.6 percent. Coupled with changing technology, merging conglomerates and the increasing casual employment that employers seem to favour in today’s economic climate, the shape of the workforce is changing, and, with it, job security.
Fiona says individuals have different ways of handling job uncertainty and this can lead to friction. “Some will just sit tight, others stock up and prepare and plan, and some live for the now and spend what they have,” she says.
It’s important to share your fears and uncertainty. “Be honest. Say you’re worried what the future might look like. Ask what you can do now to talk about it,” she says. “Work as a team and invite the other person into the problem to solve it together.”
To avoid it: Be practical. Assess your finances.“Knowing what’s coming in and going out can give you a bit of certainty when the future is unclear,” says Fiona.
First published on wellbeing.com.au
