How to money-proof your relationship: guard your love against financial stress

12 July 2017

Love can wane if you and your partner aren’t honest with each other about your finances.

Here are ways you can work through the issue of money before financial woes lead you down a path of divorce.

Trust each other

If you don’t trust a business partner with the finances of your business, that business probably won’t succeed.

The same goes for marriages and romantic relationships where you have to manage a household.

You need to be able to trust each other. Warning lights should go off if you’re hiding debt or expenses from your partner.

It’s a good idea for couples to have a fee-based financial adviser – one you both trust – to look over joint finances, Craig Torr of Crue Invest says.

Be involved

It’s problematic if one person is a big spender and the other is frugal.

This can happen if only one takes financial responsibility. You’re both equally responsible for managing your finances and both need to understand your total income and expenses.

Invest and plan together for saving goals, such as retirement. Divide expenses in proportion to your respective incomes.

The person with the higher income should cover more of the expenses and their contribution to retirement, for example, should be higher.

Read more: 5 bad habits to avoid when you start earning your own money

Talk about it

Whether you’re recently married or have been together for years, it’s important that you talk about money. Make time to discuss your finances at least once a month. The sooner it becomes part of your routine, the better.

It helps to have an agenda and work through it systematically. If you can’t easily discuss money, try going to a pleasant or exciting place, Torr suggests. Or ask a financial adviser to guide you and keep the conversation on track.

Share the responsibilities 

You don’t have to have a shared bank account. It’s important that each of you still has their own bank account as a shared account can be frozen if one of you dies.

You can still go through your bank statements together every month to determine your expenses, Torr says.

You can open an extra account for household expenses to which both can contribute. Then each can keep some of your own money for personal expenses.

Five questions about money and relationships

1. Why use a fee-based financial adviser?

You pay a consultation fee to get advice and the financial adviser doesn’t necessarily earn commission on your financial product. If you have a good relationship with an adviser, they can help you to build wealth throughout your marriage or relationship.

2. Why should I have my own credit card?

It’s important because each individual has to build up their own credit record. Remember, if you misuse it to run up debt you can’t repay you’ll build a bad record for yourself.

Read more: Here’s how to save money even if you’re drowning in debt

3. What if only one of you has an income?

You’re still a couple who should decide on money and finances together. The person who doesn’t have an income also needs financial planning such as a retirement plan, savings, and a will.

4. What do we do if family want to borrow money?

Together you need to set boundaries on what family members can expect – and stick to them. This way you can prevent unrealistic expectations and negative relationships in the long run.

5. Should I tell my partner if I make a big purchase?

Yes, when it comes to big purchases, make the decision together – if R500 or R5 000 is a big chunk of your joint income, it’s important that a joint decision is made before you spend.

-- Letitia Watson

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