Money is often seen as a taboo topic, but leading economist, Head of Strategy at InvestSMART and New Idea’s newest columnist Evan Lucas writes that being more open with your partner about finances will help you in the long run.
Even with the people we love and trust most, talking about money can be downright awkward. But tackling the financial elephant in the room isn’t only good for your bank account, it’s also good for your relationship. A recent study found 94 per cent of couples with healthy relationships openly discuss their money dreams. Here are five chats I recommend all couples have to improve their bottom line.
1. Where is our money going?
Research shows 60 per cent of people rarely check what goes in and out of their bank account, and 10 per cent don’t check at all! But knowing where your money’s coming from and going to is the foundation for all future money chats. Take some time with your partner to work out what you spend per week on groceries, how much you spend on TV subscriptions, memberships and any ongoing expenses.
Do the same for your incomes. When does your pay come in? When does your partner’s pay come in? What about other sources of income like a pension, interest payments?
2. What are your money personalities?
Once you know where your cash is going, discuss your individual financial styles. Are you a saver? A spender? Do you ignore finances altogether? Are you an investor? See if you can identify the personalities you and your partner fall into. If you are the one that keeps track of the finances and your partner is the spender, play to your strengths and let the ‘money person’ look after budgets, but keep the other informed by regular chats. This way, you embrace your differences, have split duties, and have common ground to work with.
3. To bank, or not to bank together?
Did you know around 70 per cent of millennial couples maintain separate bank accounts until marriage and in most cases, after marriage too. So, should you separate your finances? This is up to you. If you share expenses, having a pooled account is handy. It also provides a clear picture of where things are coming from and going to. Having an additional separate account allows freedom to spend money guilt free. The key to this is being open about your finances
4. What are our money goals?
The money chat that can be more exciting and fulfilling is: what is our money working towards? A holiday? A new house? Financial freedom? Discuss money goals that can inspire you to work together.
5. Our money, our future
How you retire will have a lot to do with how you spend and save money today. Talk about what you want retirement to look like and the lifestyle you want in those years. This is a talk you should have regularly, so you can update your superannuation contributions.
For more financial know-how, check out Evan’s new book, Mind Over Money ($32.99, Major Street Publishing).
