For some people, money is a taboo topic — it’s an emotive issue they just aren’t comfortable talking about. And that’s understandable. After all, money has divided families, ruined relationships and even started wars. Not enough of it and people go hungry, too much of it can equate to gross imbalances of power on a global scale. 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 westerners live.

So, it makes good sense to talk about it — especially in relationships. It’s essential to have an open and honest dialogue about finances, as there will be issues about money couples need to work through. One person might earn far more than the other or have more assets. Some couples can also have dissimilar attitudes and values around money, as well as different spending habits.

In intimate relationships money can impact on 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.

Changing times

In the last 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 once a predominately male domain.

These days, men and women both bring home the bacon, and while the glass ceiling for female wages hasn’t smashed completely, the cracks are apparent. The gender pay gap is still hovering at around 15 per cent.

But overall, compared to previous workforce generations, women are earning more, working for longer and more are returning to paid 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 4 per cent), and both sexes are doing mature-age study, so dropping off the financial grid for a while.

The value of contribution is more than money

Each person contributes to a loving relationship; whether it’s more hands-on parenting while the other does paid work, caring for elderly family members, organising social engagements or doing yard work, cooking or household chores.

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 overall.

Regardless of who has what, Schodel says it’s vital to remember that people should never be defined by their net worth. “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 creates conflict in relationships. One partner might love to splash cash about but the other watches every penny.

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.”

Make a date to talk finances

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 monetary goals, so you can talk about what you’re planning and working towards and look at ways you can manage things better.

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.”

How much money you earn does not equate to the value that you bring to the relationship.

Bennett 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 that you have to agree, but Bennett 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 calmer. 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. Schodel 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 partner, it’s also a good idea to nominate an amount of discretionary income that you can both spend on whatever you like. Schroder 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 and 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. Smith 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 right now and pay for later — many with accrued interest.

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.

Smith 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.”

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’t read them properly, you’re still liable for whatever debt you’ve put your signature on. The law says ignorance is no excuse.

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.

How to avoid big financial mistakes couples make

Lying about spending and secret debt

Financial infidelity breeds a lack 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.

Smith 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 having enough conversations about money

Working towards shared monetary goals brings financial rewards. Schodel encourages having regular money chats. “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.

Not enough insurance and not having a will

People insure their cars, homes and pets, but often income protection is something that is overlooked. Do you have adequate insurance so you and/or your partner would be OK if you couldn’t work because of an injury, or you died?

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, discuss your respective wishes and get the ball rolling with the professionals.

Insecurity about income

Fear around earnings and income is a big issue for many. Current unemployment rates stand at 5.6 per cent. 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 Australian workforce is changing, and with it, job security.

Bennett says individuals have different ways of handling job uncertainty and this can lead to friction in relationships. “Some will just sit tight, others stock up and prepare and plan, and some live for the day 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.”

How 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 Bennett.

Financial abuse in relationships

According to the Australian Bureau of Statistics, 11 per cent of Australians, both women and men, have suffered financial abuse from their partner. Financial abuse covers a broad spectrum of scenarios including not giving the other partner access to money, being afraid to spend money on small items for fear of reprisal, taking credit cards out in their name and making major financial decisions without consulting the other person, like buying a new car.

If you feel like you are being abused financially, would like some guidance or feel you are unable to cope — talk to a financial counselor or call Lifeline on 13 11 14.

 

Need help?

• Talk to a financial counselor at Financial Counselling Australia
• Call the National Debt Helpline on 1800 007 007.
• Check out the Australian Securities & Investments Commission Money Smart for some great tips