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Partners
Which brings me to my point this week – did you know that money is regarded as one of the main things couples fight about?
Okay, I’m sorry, of course you knew that. If you haven’t experienced it yourself, you’ve watched other couples fight about it or read about it in one of the million articles or books written on the subject.
I’ve always found the way other couples manage their money fascinating. It’s amazing how much insight you can get into a relationship based on this knowledge alone. And while it’s not fair and sometimes very far from accurate, I do judge the health and stability and longevity of a relationship according to its financial arrangements.
Case in point – I heard about a couple the other day who has a major earning discrepancy. He’s an investment banker and she’s a public school teacher. Which means he earns at least ten times more than she does. And yet, despite this, he expects her to contribute half towards everything. (Except their mortgage – she can’t afford half, but still contributes more than 70% of her salary to it).
So when she can’t find the money for the expensive ski holiday he wants to go on, it means she stays at home with the children and he goes with his friends. She is constantly in debt, while he saves happily for his future… And without wanting to sound cynical here, but I’m guessing it’s a future that probably won’t include her.
That said, I know of many couples who keep their finances completely separate and are perfectly happy about it. Because a joint bank account does not necessarily a happy union make.
Rather, you have to accept that people have different approaches to money and factor this into your planning. And planning is the operative word here. Because, as always, when it comes to money, planning is key.
Here are a few main points to encourage financial harmony:
• Be open about your expectations and honest about your limitations. If one of you has a dream the other would never be able to afford, this needs to be discussed and a compromise must be made.
• Understand that money often carries an emotional aspect with it. Some people only feel safe when they have a solid nest egg. Others feel the need to spend in order to feel validated. Are you a spender or a saver? And why? Talk about your money personalities and see how you can help and complement each other.
• Budget together. If only one of you handles the bills, of course arguments will arise. It’s very easy to lose track of payments if you’re not very much involved in the day to day management and have a solid idea about the monthly expenditures. So you’re much more likely to buy a new sound system or handbag on a whim if you’re unaware that the car needs to be serviced at the end of the month.
• Save together for things you’d like to do together. Not only will this be something to look forward to (for both of you) but it’s super rewarding to enjoy something you’ve worked towards. Especially together.
• Ask for help. If your money personalities are too different to reconcile, and if the fights are getting out of hand, get a financial planner to help set the rules you both have to stick to. Outside help will make you feel less defensive and a non-partial adviser can easily spot gaps that you might overlook.
How do you manage your money? Do you have joint accounts or are your finances your business? And how is it working out for you?
