We are all in one form of a relationship or the other; a relationship with a parent, spouse, partner, child, friend, employer, employee. We all know how important money conversations can be and also how awkward they get if not handled well. There are various reasons why money conversations can put us under some strain; reasons include – loss of income, one person spending too much, different attitudes toward money. Earning inequalities particularly in a patriarchal society can lead to unease, resentment, and arguments.
How do you define financial intimacy?
Financial intimacy is about having the ability to be open and trusting about money matters in your relationship. Unfortunately, many couples do not enjoy this experience; in fact many feel vulnerable and unsafe and tend to be secretive and hide the true picture of their finances from their partner. So many couples have serious and recurring arguments about money; indeed money issues have been cited as being a leading cause of marital and relationship palaver.
What is your attitude to money?
Money has been a subject that has traditionally been swept under the carpet and it was considered improper to talk about it. Attitudes to money are formed very early on in life and usually develop over many years. You may not even realize the full effect of your childhood experiences, circumstances, and your parent’s attitude towards money; indeed many people simply assume the savings and money management habits of their parents. Was money a highly sensitive topic? This could make you very reticent about talking about money. Were your parents very frugal, disciplined savers, or were they spendthrifts? You may not even realize that you have inherited some behaviour patterns from them; once you acknowledge this and recognize it for what it is, you will have a new awareness in dealing with these issues.
Here are a few simple tips to help you navigate your relationship with money.
Are you dating?
Before you commit, try to determine how your partner handles the big issues of real life, including financial matters. Discuss your dreams and goals. If your individual goals coincide, it makes it much easier to accomplish them. If they collide, see if it is possible for you to accommodate the differences assuming that there are enough common goals to build a solid future together. Money will be involved in almost everything you aspire to do in your lives together, so it is important that your goals are in sync or at least are compatible.
Where finances are tight, try to build in activities that don’t involve a lot of money into your social life. Eating at home, going out for a walk, having a picnic in the park or at the beach, playing a board game, are just a few ways of enjoying quality time without spending a lot of money.
Borrowing can present some challenges so do consider carefully before you borrow from your loved one. Determine in advance how you will deal with debt and whether it needs to be formalised in any way. Often some discomfort occurs where one party has lent some money and the other never mentions it again. Without communication such issues may fester and eventually lead to crisis.
Are you planning to get married?
Don’t go overboard with your wedding costs and certainly don’t go into debt over the wedding. It is more important to focus on your lives together than on the lavish party. If you can’t afford a huge wedding now, have something much simpler; you can always celebrate again when you can afford it.
It is usual to receive monetary gifts at weddings and other celebrations. Don’t spend it all. Set aside as much as you can to invest in your future plans to raise a family, own your own home or business.
You will probably need to review your investments as your goals come together. With the assets your partner brings into the relationship, you may achieve some investment flexibility that you could not have otherwise achieved while you were single.
Merging your financial lives
Every couple must find a structure that works for them. You must decide who will be responsible for paying certain bills, taking the lead in the family finances and so on. Remember, you are two different people with different attitudes. One of you might be a saver whilst the other is a big spender. If you like to manage your own money and be in control of your financial affairs and you are very focused and success oriented and are in a relationship with someone who is financially immature or maybe even irresponsible with money, this could lead to conflict.
Will you have separate or joint accounts or a combination of the two? Having a joint account combined with individual accounts for personal expenses is a good compromise as each partner takes some responsibility for the household budget, yet is still able to retain some autonomy. Partners contribute a certain amount of their monthly salary into the joint account to cover routine household expenses such as food, utility bills and so on. Some couples decide to pay their salaries into the joint account and then pay themselves a monthly allowance.
Plan to create a budget that can accommodate both of you within reason. One person will be better equipped to handle money matters whilst ensuring that both parties can retain some flexibility and independence, which many crave. Be guided more by what suits your individual personalities, talents or skills and not by gender.
Starting a family
Sometimes one partner must stay at home beyond the traditional maternity leave period while the other works full-time. What model can you adopt regarding your finances? Will the homemaker be paid a “salary” for her significant services? An arrangement should be put in place that shows respect for this most critical role.
If you can afford to, and decides to stay at home, don’t neglect your talents and career skills. Consider part-time work or starting a small business to seek to maintain your skills and contacts. This might be a good time to consider going back to school part-time to improve your financial prospects. All these actions will help ease your transition back into the workplace.
Don’t forget to consider your mortality as morbid as it sounds. If you haven’t already done so, this is a good time to prepare your will or put another estate planning arrangements in place which address guardianship issues should anything happen to you.
Have you remarried?
Money matters may well have been a major problem in your previous marriage. Talk about those differences so that your new partner can have a better understanding of your concerns. It is important to discuss in advance how responsibilities will be shared for any children from previous marriages who live with both of you and how their expenses will be handled.
Difficulties with communication lie at the root of some of the distressing financial issues that couples face. Just being able to communicate about money in an easy, healthy way can help ease tensions. As far as possible share your financial concerns with your partner and benefit from practical suggestions and support. Remember however, that each relationship is different and it is important for you to understand the vagaries of your own relationship in informing your actions and what is best for you.
Happy Valentines Day!
Nimi Akinkugbe has extensive experience in private banking and wealth management. She is passionate about encouraging financial independence and offers frank, practical insights to create a greater awareness and understanding of personal finance and wealth management issues. She is married with 3 children.Find out more via www.nimiakinkugbe.com