Money can be a sticking point in even the best of relationships. With help from ME Bank, we look at some ways you can reduce the stress and set up your relationship for success.
When you’re in love, nothing else matters, right? Well, yes. But did you know seven out of ten1 couples report that money causes tension in their relationship?
The good news? Although money is a frequent fault line, there are a lot of things you can do together to take your relationship and finances to new heights.
1. Talk about money
Honesty and communication are the foundations of any solid relationship. This is especially true when it comes to talking about money.
To make your finances work together, it can be helpful to discuss your financial goals. Don’t rush this discussion, give each other space and time. It may take more than one conversation.
Talking about your goals over time as part of an ongoing conversation can help you and your partner understand and appreciate each other’s thoughts, feelings, dreams and expectations.
This will help you to find common ground, so you can set goals together as a couple.
2. Respect each other’s approach to money
Sarah likes savings and spreadsheets. Michael likes online shopping and buying gadgets. Sound familiar?
Individuals in a couple often have different views about money because of their background, education and personality.
Having different approaches to money isn’t necessarily bad. In fact, your combined strengths might make a formidable team. But how you talk about those difference can be damaging.
If one partner feels attacked or judged about their financial decisions, they might withdraw or start to hide how they use money in the future. This can lead to a breakdown in trust. It can also lead to financial stress if things get out of hand.
It’s important to know how your partner thinks about money and to respect that each of you brings something different to the table.
You don’t have to agree on everything, but working together can reduce stress.
3. Set roles and goals together
Make it clear what your roles are when it comes to your finances. For example, will you both manage the household expenses, debts and investments together, or will you divide the tasks?
Also, discuss your relationship goals (such as holidays, weddings, homes, children, etc.) and understand the importance of planning for them together. Make money a key part of the conversation.
4. Consider a shared bank account
Times have changed. A survey of 2,000 ME Bank transaction account holders in March 2018 found that about a third of married and de facto Australian couples prefer to have entirely separate transaction accounts2.
But a joint savings account can be a useful tool to achieve shared goals like saving for a first home or an annual holiday.
If you’re not sure about how it will work, start small, using a joint account to tuck money away for inexpensive goals like a weekend away.
Also automate your finances by agreeing what is transferred in and out of your joint account. It’s easier than having to chase up money from your partner.
If your trial run works and you decide a joint account is the way forward, try developing a savings plan you can both contribute to. Establish what you believe are fair budgets for spending on non-essential items. Try setting spending limits, such as ‘neither of us can spend over $100 from the joint account without consulting the other’ to eliminate any financial tension.
Importantly, allow room for each of you to enjoy your own hobbies or interests by establishing a weekly ‘me-time allowance’ — money you're each free to blow on whatever you want, no questions asked.
5. Decide how to split finances
It’s also sensible to discuss how to split finances. Many couples work out a system that's comfortable for them. Each person may contribute to the home loan for instance, while one person focuses on groceries and another pays utility bills.
Whatever the case, be prepared to review your combined finances regularly in a calm, relaxed way. It can be challenging for couples to deal with shared money matters, but for those who make it work, it’s often a case that the team is stronger than the sum of its parts.
It’s possible you could achieve greater financial security by working together than you can by maintaining independent financial lives3.
Sources: 1 Relationships Australia, relationships.org.au/whatwedo/research/online-survey/august-2015-impactoffinancial-problems-on-relationships, Accessed 16 January 2017. 2 Don’t go breaking my heart…or my bank account, Members Equity Bank Limited ABN 56 070 887 679 3 How to handle money in relationships, Members Equity Bank Limited ABN 56 070 887 679
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