It may not be what you had in mind for Valentine’s Day coming up on 14th February, but it could be one of the most important conversations for your relationship that you’ll have. Talk to your partner about money.
Research by Relationships Australia shows the four main reasons why relationships suffer are:
- financial stress
- communication difficulties
- different expectations and values, and
- lack of trust.
In the United States, couples argue on average three times a month about financial issues. Surprisingly, 55% of adults living with a long term partner do not set aside time on a regular basis to discuss their financial issues.
Lyn Fletcher, relationship expert from Relationships Australia, says many people find their discussions about money end in arguments, which can lead to avoidance or ongoing difficulties in communicating about this important subject.
“It’s not just about money, but also what money represents – our way of life, our expectations and our dreams,” says Fletcher.
“Talking about money often goes to the heart of what we want out of life and this can make us a feel a bit ‘touchy’ and vulnerable. Discussing your financial situation is really the ‘business end’ of relationships. Talking about it can’t be avoided forever.”
This advice is supported by Motherpedia reader and full time primary school teacher, Roslyn Cunningham of Rockhampton.
Roslyn, who is 45 with three children aged 10-16 years says she and her husband of 20 years have always talked about money.
“We’ve always made a time at least once a year to talk about our finances, how they’re going, what we want to achieve, how much we can afford to spend on something and so forth.
“We do it once a year at the beginning of each year and have done so since before we were married. It has stood us in good stead in terms of our relationship as well as what we can do. We had a fantastic 12 months travelling and working overseas in the 3rd year of our marriage, we have an investment property, our kids are not at private schools but they all play sport and do music and go on excursions to Canberra and Central Australia and places like that, and we will be mortgage free at the end of next year.
“In about ten years time when our youngest is either at uni or some sort of further education, we’ll both be under 60 and ready to start spending money on ourselves again.
“Knowing where you stand with finances as a couple also makes it easy for us to respond to the kids when they ask for something as they inevitably will.
“We both know whether we can afford it and we’ll give the same answer!”
Lyn Fletcher says it’s helpful for couples to discuss money when they’re not pressured.
“Make a date to talk about your finances in the same way as you’d make a business appointment. Find a place where you both feel comfortable and allow enough time to talk AND listen to each other. Make room for differences and sort out together how you handle money in your relationship.”
“If you find yourself getting agitated or upset, take time out, and if you don’t ever seem to able to come to a satisfactory resolution, it might be time to seek practical, professional help.”
Here are some tips for talking points for couples on money from MoneySmart by the Australian Securities and Investment Commission.
What are your relationship goals?
- Do you want to get married, study, work overseas, buy a home or have a baby? These are all useful questions to ask to compare your goals.
What is your current financial situation?
- Take stock of all your earnings, savings, assets (any shares or property you own) and debts (even credit card debts) so you know where you stand.
What is your experience with saving and spending?
- Everyone has different experiences with money. Discuss how your parents dealt with money and how you approach spending and saving.
Who’s going to pay the bills?
- Who will handle the finances? Will one person look after household expenses and the other the mortgage? Make sure you're both happy with the decision.
Will we have joint or separate accounts?
- When would you expect your partner to check with you before spending money? Is some money just for one person?
This last question can be one of the most difficult for couples. According to Robert Drake of MoneySmart, the important thing is to have the discussion in the first place.
“Don’t be embarrassed or afraid to raise this with your partner and come to an agreement together.
“It is also important not to be blinded by love and keep a sense of your financial self. If you are considering a joint loan, make sure you understand your responsibilities and agree on the terms. If your partner defaults, you may be liable for the whole amount, plus fees, interest and charges - even if your relationship ends,” says Drake.
For Roslyn from Rocky, she says when she and her husband married, they both had secure and well-paying jobs but they moved to one joint account even though some of her friends said she would “lose” her independence.
“Partly that was because of our mortgage as it was an offset account, but it’s also because we have always seen having shared financial goals as an important aspect of our life together.
“In the time when I wasn’t working, which was for a period of about ten years, this didn’t concern me and I never felt less independent as a person just because I was a wife and mum at home.”
ASIC’s MoneySmart website provides tips and tools to help couples manage their money.
Savings goals calculator -Come up with spending and savings goals and guidelines, then let your partner manage his or her own spending money.
Money health check – For those who aren’t sure where to start, this tool assesses your financial health and shows you how to improve it.
Mortgage calculator – Shows you how much you can afford to borrow and what your repayments will be.
Super contributions optimiser -If you are married, you can ask your employer to pay super contributions to your spouse or de facto partner.
For those at a later stage in life, there’s the Retirement Planner.
If you need help in discussing finances with your partner, contact Relationships Australia on 1300 364 277.