Love and Money

Finances can cause tensions in relationships but talking can help.

Money may not buy you love but being on the same page about it has, for a long time, been seen as a critical factor to relationship harmony.

COVID-19 job losses, reduced work or redundancies have hit many hard. If you or your partner have been feeling the stress, it may help to know that even the best relationships can come unstuck when it comes to finances.

Instead of approaching the big M-O-N-E-Y talk as a chore, try planning a night where you sit down and map out a financial game plan together, perhaps over a pizza and bottle of red.

Here are some topics to get you started.

1. How do you feel about money?

We all have different attitudes to money.

Some of us are savers, some spenders. Some of us see money as security, while some see it as freedom. Understanding how you and your partner view money is critical to a healthy financial foundation.

Start by having an open discussion by asking your partner what their attitude is around personal finance. Is it something that stresses them out? Or do they perhaps feel in control? What did they learn about money growing up and how did their parents handle money?

Having this conversation will allow both of you to understand where you think similarly, where different and if a middle ground can be reached with where you differ.

2. What are our current financial goals?

What money goals are you trying to achieve?

The Australian Bureau of Statistics surveyed the household impacts on COVID on income and savings and found that over the next 12 months, over one in three (32%) Australians plan to use their current or expected savings on travel, one in six (16%) plan to renovate their home and one in seven (15%) plan to use the money for mortgage repayments.

What are your goals for the year? Is it saving your first home deposit? Getting a better deal from your lender? Maybe you’re keen to build up an emergency savings buffer? Have a discussion with your partner and see if they are on the same page. A simple activity to accomplish this is if both you and your partner write down your top three financial goals for the year. It’s important to complete this step separately!

For example:

• Save for a house deposit
• Track spending better
• Build emergency fund

You can then share these goals with each other to determine what the key priorities are for your finances.

3. Is our budget up to date?

Have the last two years led you to reassess any of your financial priorities? Many Australians learnt a few lessons from lockdowns that have led to longer-term changes in their lifestyle and budget.

Discuss these new budget changes with your partner. Do you both agree on the new budget? And, if you don’t already manage a budget - how will this be done? Will one person be responsible for it or will it be a joint effort? What tool will be used, a spreadsheet or an app?

While you may not agree on this 100%, keep in mind that relationships are about compromise. For example, your partner may want to include a weekly cleaning service in the budget, while you would rather allocate those funds elsewhere. You could meet them in the middle and opt for a monthly cleaning service instead. It’s all about working with each other.

4. Do we know and understand our credit scores?

Whatever your goals are, your credit score is a key part of achieving them.

Do you and your partner know your credit scores? Thankfully, understanding your credit score has never been easier.

Find out if there any key factors contributing to your credit score that need addressing. If so, discover some easy ways you can improve your credit score starting today. These include paying your bills on time, reducing unnecessary credit applications, and regularly reviewing your credit report for any suspicious activity.

Being on the same page is important, and never less so than in love. Knowing your credit score is a critical part of keeping your finances on track. Make it a habit to regularly monitor your credit score, so you can start having heart-to-heart conversations about your money.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.