The second leading cause of divorce is…
Whether it’s asymmetric earnings or excessive spending habits…
Money problems are marriage killers.
What can be done to sort this out before it’s too late?
Many couples don’t disclose their financial obligations or spending habits early on.
It’s a big issue.
Things like debt, credit cards, etc. are concealed and slowly exert pressure on the relationship over time…
Until things start ripping at the seams.
This financial infidelity can be as catastrophic as physical infidelity...
Something one of our clients experienced first-hand.
She became ill late last year.
After exhausting all her sick leave, she took unpaid leave to recuperate at home.
Financially, the couple should have managed.
Their liquid assets were twice their combined annual salaries.
But wiping away at those savings with hurricane-like force…
Were medical bills, specialist visits and a huge credit card bill her spouse managed to hide from her.
Because they were high earners, she previously paid little attention to where the money went.
Life was good.
Now she scrutinised every bank transaction…
And the credit card payment was 30% of their total monthly expenses.
It caused financial strain and tension in the marriage…
Soon becoming the root cause of all their arguments.
Turning their conversations monosyllabic.
While neither could have anticipated the health issues that occurred…
The arguments could easily have been avoided.
Our organisation looks after the finances of many couples.
Sometimes our meetings feel more like marriage counselling than meeting with an adviser.
But that’s okay.
Because a true financial planner wants to understand not only your financial goals, but what is holding you back from achieving them.
Here are 5 ways to build financial trust in your relationship.
1. Start with goals
Ask your spouse what they want to achieve.
What are their dreams?
When do they want to retire?
What does their ideal financial future look like?
Thinking and talking positively about money gets you off on the right foot, together.
2. Talk it out (and be honest)
Transparency is the cornerstone of any successful relationship.
You should be as honest about your finances as with everything else in life.
Unfortunately, not everyone’s comfortable talking about money.
But don’t let fear or discomfort stand in your way.
Take the time to sit down and lay all your cards on the table…
(Literally and figuratively).
Discuss things like salaries, debt, credit cards and investments.
Go through your current money behaviours.
The good and the bad.
Be honest and admit to mistakes you've made and what you can do to ensure you don't do the same again.
If you don’t, money issues will always be in the background.
And they tend to be revealed when we’re at our most vulnerable.
3. Establish your roles
Who pays for what?
This can get awkward if you don’t discuss each of your responsibilities and obligations.
Will you split the bills evenly?
Will one cover the mortgage while the other pays for living expenses?
Do you put aside a percentage of each salary to cover expenses?
Or, does one income go towards spending and the other to saving?
This might mean you have to compromise.
As a long-term couple, you need to merge your financial lives.
You need to work as a team – especially when children are involved.
4. Create joint accounts
Do you trust your partner?
(The answer should be a definite “yes”).
Do you have joint accounts that either of you can access at any time?
(The answer should, again, be “yes”).
However, merging finances can be scary for some.
After all, if something bad happens to the relationship, how would you decide what’s mine and what’s yours?
Whatever the reason for not doing it, merging your money is an important way of establishing trust.
As long as you're together, you're a partnership.
You can both keep your own separate accounts but having a joint account for living expenses just makes sense.
Talk about your currents regularly to stay on top of your situation.
5. Set the right foundations
Many couples have come to us for help in the past.
Setting up joint investments and retirement plans has been a fantastic way for them to establish trust, show their commitment to one another and plan for the future together.
Having a third party involved seems to make it easier to create goals and a plan to reach them.
It takes the pressure off each individual and, instead, looks at their finances in a way that’s devoid of emotion, biases and conflict.
We can do the same for you.
The sooner you start, the better.
At the end of it, you’ll feel relieved, confident, empowered and good about your financial future…
And your relationship too.