Make money teamwork a habit
NOTHING puts more pressure on a relationship than financial stress.
Sure romance is important but just as important is that you're both on the same page financially. It's an issue which needs to be addressed early in a relationship but then needs to be worked on consistently for years to come.
It's amazing the number of couples we see who start out on the same page but, as the years go on, take for granted that they are joined at the hip when it comes to their financial future. They lose focus on working together which leads to disagreements, lack of discussion and increased stress.
The first step is identifying whether there is a problem of financial compatibility and, if there is, then rectifying the problem for the sake of the relationship.
Your financial relationship is in pretty good shape if you both:
• Talk about money without arguing.
• Feel in control of your finances.
• Pay bills on time.
• Don't stress about making plans for the future
• Calmly work through financial hiccups together
The bottom line is can you as a couple work towards team finances? If that's not happening in your relationship now, start making the changes before the stress builds to breaking point.
Just as you would in a small business, it's best to have a business or strategic plan that you review along the way, particularly with regard to where the business partners have various responsibilities.
Relationships are similar. You need to have a common vision of where you are going with your money and what your goals are … whether it's to travel, pay down the mortgage or get on top of the credit card.
The foundation of your financial relationship is built around some key habits you need to agree, and stick to.
Here are some suggestions to get you started;
1. WORK AS A TEAM
You're a couple, so it's important you resolve problems and make financial decisions together. Money matters are a responsibility that should be shared. You don't want one person deciding how to spend and invest for you both. It's a huge responsibility and can be very stressful.
2. EDUCATE YOURSELF
For two people to jointly manage their finances, each partner must have a basic understanding of money. You don't have to do a fancy investment course, start by opening your eyes and ears to financial news and websites.
The more knowledge you have the more you will understand advice from your bank, financial planner, and those well meaning family and friends.
3. FIND A FINANCIAL MENTOR
Seek as much free information as you can get. If you know someone who manages money well ask them to be your financial mentor and pick their brain. If you want to keep your finances confidential, look for guidance from someone outside the family.
4. DEVELOP A PLAN
Your relationship will be strengthened when you work out a routine for handling your money and find solutions to any financial problems.
Start by doing a family budget together. Tally your income, family benefits and any money from investments. Then get your bills and receipts and try work out how much you're spending each month. Your budget will show you where your money is going, how much is left over at the end of the month and where you can cut back.
5. SAVE WHAT YOU CAN
You and your partner need to have a common vision of where you are going with your money. Start by setting savings goals. Talk about where you want to be financially in the short, medium and long term and how you're going to get there.
The biggest thing we've learnt is couples on average weekly wages, who are disciplined with their money and work towards the same goals, often end up with more wealth than those earning three or four times as much but spend the lot.
They will build a "savings" line into their household budget which, just like regular expenses becomes part of their normal money management.
6. NEVER AUTOMATICALLY RENEW ANYTHING
We tend to get comfortable and lazy with our money. A regular bill will come and we often just automatically pay it to get it done and out of the way rather than stop, check it and question whether we're getting the best deal.
Whether it's your phone and internet plan, insurance policies or bank fees, how often do you see your supplier advertising a great deal to get new customers and wondered "am I getting that deal" … probably not.
Take the time to ask for it. Ring up the supplier and ask whether it's the best deal for your current circumstances. Explain that you are comparing them with their competitors and you'll be amazed how they'll come to the party.
7. PAY DOWN EXPENSIVE DEBT
Understanding, and managing, debt is such an integral part of any relationship. Whether it's credit cards, mortgage or personal loans.
A key habit is prioritising debt to target the expensive, high interest, consumer debt first.
If debt levels become an issue examine strategies such as consolidation or balance transfers as a way of getting it back under control.
DISCIPLINED MANAGERS OF MONEY WILL …
• Have a budget, stick to it and review it six-monthly.
• Save something out of every pay.
• Borrow on items that will appreciate in value.
• Use professional advice.
* Keep learning.
* Network with other financially-successful people.