So you fell in love. As the butterflies settle and things start getting more serious, money turns into a more serious issue than who pays for dinner and drinks.
It is commonly held that money is one of the leading causes of divorce. A new documentary BRAND: A Second Coming has revealed Russell Brand and Katy Perry split, not because of busy schedules, but due to her rising fame and his move towards activism.
It might seem obvious you are incompatible if your spouse is headed off to join the Occupy movement, or visit charities in Kenya, and you are embracing the lifestyle of a millionaire international pop star. But for most couples, financial warning signs can be subtle.
Independent financial adviser with Bennelong Private Wealth Bill Raffle warns the main concern should be a compatible overall view of money.
“One person may be saving for a house and another may be spending on a car or entertainment, and often the big picture financial plan isn’t discussed and you get problems at the detail level.”
MF Financial Solutions director Fergus Hardingham agrees, saying with money a leading cause of couples splitting, good money management is needed.
So before your partner goes off on a shock charity trip, here are the six warning signs you need to watch for in your other half’s wallet.
1. Being generous … too generous
Your new partner may have swept you off your feet with their generosity, but Mr Raffle warns that traits like this can become tiresome.
“Some of the things that may draw people to someone else may be a two-edged sword, like generosity.
“After you meet that person, you might want to turn them into a spend thrift…It’s all right they are generous to you but then you don’t want them to be generous to everyone else.”
2. Spending lots, saving little
If you are diligently saving for a home deposit while your partner spends up on hip dinners and new trainers, Mr Raffle says it’s time to talk.
“How much money do they have? In the time you’ve been together is their net wealth going up or down – are they spending more than they are earning?”
“[Another issue can be] when one member saves in their name – preferring to spend the other partner’s savings and income,” Mr Hardingham says.
3. Treating you like their personal ATM
Mr Hardingham warns that asking to borrow money early in a relationship can be a nasty sign of one member of the couple being seen as a walking ATM.
4. Keeping their finances a secret
A lack of transparency with finances can be a warning sign.
Mr Hardingham says a couple treating money as his and hers can lead to money conflict especially when one member is in receipt of a higher salary.
“Likewise, having to ‘borrow’ money from each other we would suggest is another warning sign….if a couple is looking at living together (with or without marriage) and share a home, possibly even purchase a home together and have children – surely their money can be a shared asset.”
5. Holding the opposite view on renting vs buying
Living together is a big move for a couple and Mr Raffle says it comes with compromise. But there’s reason to be concerned if your “dream home” varies significantly from your partner’s.
“One may want to rent and someone else may want to get into the property market, and then there’s how much debt are people comfortable with holding.”
6. Refusing to compromise
If your bank accounts are going in opposite directions, Mr Raffle says to be cautious about your next step.
“If you are looking for a long-term relationship, you must address issues sooner rather than later. Issues like [spending more than you earn or credit card debt] don’t get better over time and they don’t get better by ignoring them.
“Some people won’t change, but you have to work out whether you are or are not compatible and is that worth pursuing.”