Finance Why discussing money early is crucial to healthy relationships

Why discussing money early is crucial to healthy relationships

Different financial goals could lead to heartbreak for Australian couples. Photo: TND/Getty
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More than half of Australians would consider breaking up with their partner for having different money habits, according to a new survey by Afterpay.

Data released by the buy now, pay later giant on Tuesday also shows being a ‘money match’ is particularly important to Australian women and Millennials.

But 15 per cent of Australians have never talked about money in their previous or current relationship.

Relationships Australia NSW CEO Elisabeth Shaw said conflicts over money are in the top five issues “in almost every survey on couple conflict”.

The importance of money talk

Ms Shaw said couples are “hesitant” to discuss finances because they are seen as more private than other issues.

As a result, people make assumptions about their partner’s plans for the financial future, only to be disappointed later.

She said conversations about finances should be based around “the philosophy of how you want to live”.

“It’s the degree to which you have common goals,” she said.

“If one person is very comfortable with a high level of spending [and] a low level of saving, and the other is the opposite, then those sorts of things feel like a big clash.”

Fitzpatricks Private Wealth financial adviser Gianna Thomson said most financial arguments between partners stem from divergent upbringings.

She said a person’s experience with money as a child will affect their “money mindset” as an adult.

It is normal for people to have different relationships and goals with money, she said.

But couples need to talk openly about finances from the beginning of a relationship.

Ms Thomson said although talking about money might seem “taboo”, couples should “break down norms” to reduce tension and arguments.

How to broach the subject

Ms Thomson said there are no rules for when a couple should join finances and doing so was up to each individual couple.

But Ms Shaw said as soon as a couple has an ongoing commitment involving money, from saving for a holiday to paying a lease, they should have a discussion about money goals.

If you encounter a financial issue during a relationship, “good communication will see you through”, she said.

Rather than starting with accusations, couples should aim for a calm discussion to air their concerns.

“If you say, ‘Look, I’ve got some worries about how much we’ve got in the bank, and I wish it was more,’ that’s … owning the problem, rather than making an accusation,” she said.

Questions to ask

Ms Thomson told TND these are some of the biggest financial issues couples should face head on:

  • Discretionary spending: Couples should agree on and set aside a guilt-free, argument-free amount of money for their spending
  • Joint spending: Couples should work out their joint expenses for things like holidays and rent, and consider opening a joint account with a pre-agreed regular deposit amount
  • Consider a prenup: If you have built wealth or inherited money individually, you might want to organise a prenuptial agreement to protect your assets
  • Sort out your super: If you live with your romantic partner, confirm your binding death nomination with your super fund to ensure they do, or don’t, receive your super payout after your death
  • Childhood ‘money memory’: Ms Thomson said finding out how your partner was raised to view money could help you understand their current values
  • Check for “sexually transmitted debt”: Find out how much debt your partner has, and why, to avoid nasty surprises down the road
  • Confirm goals: Discuss where each person sees themselves financially in five years.

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