MY MONEY

Why you need to talk about money in your relationship

By

Most of us can agree that a healthy relationship is co-operative and transparent. Yet when it comes to joint finances, many relationships are anything but.

In fact, research by the Financial Planning Association (FPA) has found that more than 46% of Australians are taking the lead role in financial decision making, leaving their partners in the dark.

FPA CEO Dante De Gori says, "A healthy relationship means there is a healthy understanding and awareness of the financial situation: where assets are owned, the inflow and outflow of money, and there aren't secrets and ambiguity around that."

why you need to talk money in your relationship valentine's day

In contrast, the worst relationships often involve escalating debt that's being hidden away by one partner.

However, transparency and openness don't necessarily require evenly split decision making.

"People assume different roles in relationships, and finance is no different," says De Gori.

"Someone will generally take the lead role, but that doesn't mean the other party isn't aware or consulted."

Talking about money has sunk to the level of social taboo, further preventing open communication between couples.

"Even though the conversation might be uncomfortable, once it's had, a weight will be lifted off your shoulders," says De Gori.

Almost one in three Australians in a relationship admit to having kept a financial secret from their partner, according to a MyState Bank survey.

The survey also found that 32% have lied to their partner about the price of a purchase, 13% have a secret savings account, and one in four have separate accounts and don't share expenses.

Family lawyer Patrick Earl of ADS Law says marriage breakdown is often the result of financial incompatibility.

"If a miser marries a shopaholic then I am pretty sure they are going to end up seeing a lawyer like me," he says.

"People don't realise that once you're married you're stuck with the financial decisions your partner makes so you both need to be on the same page. Just as you get to split the assets when you get divorced you get to split the debts as well."

It's the credit file that hides the skeletons in the closet.

"Because credit reporting has changed, now if you are 14 days late paying a bill it goes on your credit file," notes Doessel.

"Get just one of these and a happy couple will soon find they can't take that next step of buying a house or car on finance or perhaps can't even get credit at their baby store."

Black marks on the credit file are easier to get than you might think, so Doessel suggests checking your credit file once a year.

RELATED STORIES

David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
Comments
Graham Doessel
February 19, 2020 10.40am

Great article David, Thanks for the mention.

Yes, the number of people that discover 'issues' on their credit files is staggering, and far too many of them find out only when they get a decline on their car or home loan finance application.

Post a comment
Link to something ZOMVqoSX