Couples should be upfront about cash to avoid confrontation

FRIDAY, AUGUST 12: Do you argue with your partner about money? 

Studies done by relationship experts have revealed that seven in 10 couples believe financial problems push couples apart rather than bringing them together.

Studies also show that more than half of us cite financial stress as the most common reason for a breakdown in relationships.

So often, relationships are put under strain because partners do not talk about what they each want from their money, or understand where the money goes.

Any couple who makes a commitment to a relationship needs to have honest discussions around finances and to establish expectations about matters such as having a family, enjoying regular holidays, buying cars and carrying out necessary renovations. 

New couples especially need to be open and forthright about their individual viewpoint on living together — from making a decision on whether to rent or buy, to purchasing new furniture, to acquiring more space for a future family.

Debt can be a relationship deal-breaker, so be clear right from the start about managing your debt, especially credit card debt.

Also discuss how long you are both comfortable with having a mortgage and whether you both intend to make it a priority to pay it off sooner.

Investing the time to organize your finances and set realistic expectations and financial goals for the short and long term should help to reduce the associated stress.

Tips

People need to take a proactive stand when it comes to money matters.

As a couple, you should both have an idea how financially stable you are. 

In order to become successful at living together, both of you should agree on most of the decisions, particularly those regarding money management. 

Ascertain your ‘net worth’, then come to an agreement as to how you will handle your finances. 

It is better to be prepared and expect the unexpected.

Start reviewing your statements together and discuss financial plans every month. 

Planning together is much more effective than only one of you handling the finances. 

The whole family will benefit from the effective strategies that you both develop.

The following five steps are designed to help couples keep on top of their finances:

• Develop a financial plan.

Look at your money holistically. Put in writing what you want to achieve financially and list the steps that will make it happen.

• Set a realistic budget. Make a list of what you earn and what you can commit to in savings.

Work out how much you spend on a weekly, fortnightly or monthly basis, including essential expenses such as mortgage repayments, insurance and savings, as well as luxuries such as holidays.

• Regularly review your financial goals.

Conduct a semi-annual health check on your finances to keep track of your actual spending patterns and any necessary changes that need to be made.

• Communicate.

Talk to your partner about financial issues as they arise and be realistic about the solution or outcome.

Never try to avoid the situation because it may make matters worse.

• Seek professional financial advice.

If you encounter hardship or financial difficulties, talk to your financial institution or a financial planner to help get you back on track.

Communication

Merging your finances is like a company merger — that is, bringing two big players together to form one larger organization. 

However, merging the finances of a couple involves a lot more emotional baggage and therefore needs a little more sensitivity.

In any relationship you are going to have the spender and the saver. 

You are always going to have one partner placing more importance on a financial decision than the other, but that’s what makes life interesting.

There really is no right or wrong when it comes to merging finances.

The most important element of all is communication.

Carla Seely is a Senior Wealth Manager at AFL Investments. Contact her at 294-5712 or [email protected]