A recent survey revealed that over 61% of people have NEVER discussed retirement with their significant other. People are more afraid to talk about money and finances than they are to talk about death. It is rare that for couples to be financial soul mates…but there are some important steps you can take to ensure a financially happy marriage.
Today, I’ve revealed six secrets to leading a financially happy life with your significant other.
- Invest as a ‘Team’
It is rare that both partners will share the exact same attitude towards risk. One (typically the husband) will be far more adventurous when it comes to taking risks with investments and the other is generally the more conservative one. When you’re defining your own investment strategy as a team, sit down together and outline a portfolio mix of assets that you’re both comfortable with. This can include a mix of equities (shares), property, bonds and cash.
In a world filled with so much marketing and readily available information, chances are you will hear about new investment opportunities on a regular basis. Before making any decisions, discuss them with your partner and review them as a team. This can be a good opportunity to bring in an external adviser to provide an unbiased, neutral view on the investment for you. By making your investment decisions as a team, you’ll ensure that you both feel in control of your financial destiny.
- Create a Communication Plan
We all lead incredibly busy lives, which only seem to be getting busier. From taking the kids to sports, to running the household, to heading to work every day, time can quickly disappear. One of the biggest causes of arguments in a relationship when it comes to finances is a lack of open communication. It’s absolutely critical that you schedule time on a regular basis to sit down together, to discuss your finances. If you keep a diary, schedule some time together and treat it with the importance of any other business meeting that you must keep.
This should include all important financial matters from your household budget, allowances for your kids, university or school savings, retirement strategy, investments and any planned major expenses coming up such as a family holiday. This discussion should be in a relaxed atmosphere, perhaps over a glass of wine, and ensure that you both have an opportunity to have your say.
- Have Individual and Joint Bank Accounts
An important aspect of a happy marriage is to ensure that you still retain some independence. It’s vital that you have the ability to spend or save without the need to consult each other every time. Below are some of the key accounts that you might like to have in place on a joint basis:
- Household Expenses
- Retirement Savings
- Holiday Fund
Having individual accounts can also allow you both to build up a credit score, by having credit cards and accounts in your own name.
- Share Your Joint Expenses
Ensure that you have a system in place to divide your household expenses on a regular basis. This includes utility bills, phone/internet and of course the rent or mortgage payments. Whether you have a joint bank account to cover these expenses, or divide the bills and each pay from your separate accounts, ensure that everything is kept transparent and neither partner feels that the other is not ‘paying their way’.
It’s also a good idea to ensure that the division of bills is equitable. For example, if you are earning $250,000 and your partner is only earning $50,000 per year, it’s important to ensure that the bills are divided equitably with you partner a higher portion of the expenses given your higher disposable income.
- Create Financial Goals as a Team
‘If you don’t know where you’re going, any road will take you there’ – Lewis Carroll
Far too many people have never discussed their financial goals with their significant other, simply assuming that they must want the same thing. This is rarely the case. It’s important that you openly discuss your financial goals and start working towards setting financial goals as a team. Whether this be retirement, paying for your kids to go to Harvard, or affording that holiday to Hawaii, ensure that you’re both clear on and motivated by your joint financial goals.
- Avoid Keeping Financial Secrets
With money being such a taboo subject for many couples, the number one secret to a financially successful marriage is to avoid keeping secrets. Be open about any money you owe, how much you’re spending and any other financial obligations. Whether they be big or small, it’s important that you be open with your partner about your finances, if you’re to expect the same from him or her. Complete financial transparency will help you to build trust in all areas of your relationship and you’ll both be happier as a result.
As you can see, the secrets to leading a financially happy life with your partner are not complicated, but by making small changes and implementing some of these steps above, you can ensure and long and fulfilled relationship with your partner.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.