The issue of money is the leading cause of friction, broken relationships and divorce, yet most couples ignore the need to discuss their financial compatibility such as their attitude to setting goals, budgeting, borrowing, spending, saving and investing. One of the things that will determine your success as a couple is the way you handle your finances. Addressing money issues when there is no immediate pressure to make decisions should make things easier.
What is your money personality?
We all have unique personalities that influence the way we feel about money, saving and spending. Is your partner a miser that hates to spend at all or a shopaholic that spends without any planning. Extreme behaviour can be an issue whether it is from over spending or not spending at all.
Understanding your partner’s money personality is an advantage in a relationship. Relationships evolve, so even though views may change when you are married, the fact that the issues have been broached, reduces the possibility of a serious conflict. You do not need to have identical views on money to be able to build a successful future together, but if you have some understanding you can adjust, adapt, accommodate or resolve the issues surrounding finance.
Talking about money too early might make your significant other nervous but once you get a sense that your relationship is going somewhere, try to include some of these questions in your money discussions.
- How much do you earn?
- Do you have any savings?
- Are you in debt? How much?
- What major life goals do you want to accomplish?
- Where will you live?
- How much risk are you prepared to take?
- Do you have insurance to mitigate some of the risks to your property, health or life?
- How many children do you plan to have and what sort of education would you like for them?
- How do you envision your retirement?
There are tell tale signs
Action speaks louder than words so there will be some areas that you can deduce just from their lifestyle. When someone is really a big spender, without the income or investments to back it up, you ought to be concerned. Do they live way above their means? Does he or she spend without any thought for the future or about the consequences of their spending decisions? Is your partner in debt and owing so many friends and relations?
Does she insist that she can only ever be seen wearing expensive watches and jewellery, designer clothes and shoes and the cost of one of her handbags can pay your salary for six months? Are you going to be able to afford to maintain that lifestyle if that is her expectation and neither her nor your income can cover these luxuries?
If you have noticed that your boyfriend recently financed with credit, the purchase of a luxury car that he really can’t afford, you ought to bring it up, particularly if the relationship is serious. It’s none of your business if it isn’t.
Joint accounts, separate accounts or a combination
When it comes to combining finances, there is no one size fits all; some couples merge their finances with joint accounts, whilst others prefer to keep their finances separate. Even the best system is not always appropriate for every circumstance, so plan to modify your system as your relationship and financial situation evolves and find an arrangement that works best for both of you. Will one person pay all the bills or will you share in proportion to your income? Will you both work or live on one person’s income?
Within a marriage, a husband and wife ideally should be financial partners. Discussing finances might not be romantic but it really is very important to address issues before committing. After the wedding comes the marriage. Considering money matters together provides a great opportunity not only for strengthening a relationship but also for fulfilling mutual goals with a sense of direction and purpose.
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
source: Punch/ Nimi Akinkugbe