Some consider it bad etiquette to discuss money. And, it’s unfortunate but true that we can be judged by our wealth or lack thereof, as well as by our interest in and attitudes towards money.
We can also appear judgemental ourselves, or simply insensitive, if we bring the topic up and offer our opinions at the wrong place and time. But, as ever, context is everything. Talking about money with your partner or family is not only okay, it should be encouraged.
Money issues are commonly cited as one of the biggest factors influencing relationship breakdowns. In fact, the most recent research by Relationships Australia listed money stress amongst the top four reasons relationships suffer.
Being able to rationally and calmly discuss money — rather than argue about it, is key to a healthy relationship.
It might sound unromantic, but for the long-term good of your relationship, now is a great time to make a resolution to work on your communication about money.
Here are five ideas to get you started:
Make a date to talk about money – Suggest that you make a time to sit down together and run through household finances. Choose a time when stress levels are low, when the kids are in bed, for example, or you’ve just come back from holidays and are both feeling relaxed.
Put everything down in writing – as the starting point to knowing exactly where you’re at currently. List how much you owe (on all debts), how much you have in savings, how much each of you has in superannuation, how much you have invested and in what.
Talk goals – Once you know what your financial position is, talk about your goals for the year ahead, for the next five years and longer term.
Discuss options – talk about the strategies you might use to reach your goals. There is no need to make decisions at this point just talk through everything as ‘an option’. Remain open and even if your partner proposes an idea that you think is crazy, try to resist debating at this stage.
Have a break, then reconvene – Once all options are written down, sit on them for 48 hours. Then come back together and take turns to talk about what options would work best for you as a couple. At this stage consider seeking professional advice from a financial planner. A third party and financial expert can bring to light things you might have both overlooked.
Lastly, as well as being on the same financial page as your partner, it can help to find a friend who can act as your money buddy to keep you on track.
After all, everyone knows the benefits of having an exercise buddy – they motivate you, encourage you and make the whole experience fun. It can be the same with money. But how do you find a good money buddy?
You really have to know someone well to give your opinions on money because you are essentially disclosing personal information about yourself. Before deciding on a trusted friend to take on this role, here are some things to think about: how long have you known them for? What level of mutual disclosure exists in your friendship? Are you on the same economic playing field? Are they interested in managing money?
Sharing tips and ideas on things like saving money and budgeting is great. Just be aware though, when it comes to things like investing and strategies for paying down debt, it’s not a one size fits all approach. Keep an open mind to suggestions, but always seek an expert opinion to make sure that decisions you make match your goals, your comfort with risk and your timeframe.
*Claire Esmond is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706. Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.