Are you on the same financial page as your partner? This little habit could not only save your money, but also your relationship.
Here’s a challenge: I want you to spend 15 minutes a month thinking about your money.
It doesn’t sound like much but how many people, individually or as a couple, actually sit down and think or talk about their finances? I’m not talking about paying bills, checking the credit card statement or doing the banking. That’s managing your money and very different to being informed and thinking about your money big picture.
So often relationships are put under strain because partners don’t talk about what they each want from their money or understand where it goes. It’s crazy because financial worries are a common cause of relationship breakdowns.
One of the most common questions I get asked is, “What can I do with my money?” My immediate reply is always, “What do you want your money to do for you?” In other words, you need to decide first.
Getting started
Start the first month’s 15-minute session by just getting organised and making sure you both know where all your financial documents are kept and whether they’re up to date.
Collect all the insurance policies (life, disability, health, home and contents etc), check the cover is still right for you (if not shop around for alternatives) and put them in the one place where both of you can easily access them.
The same with mortgage documents, superannuation accounts and reports, bank documents, investment records as well as tax returns and receipts.
Then there’s the will. No-one likes talking about the possibility of death but the prospect of leaving your family in the financial lurch is just plain stupid. Read each other’s wills and make sure they’re current and relevant.
Just knowing where your financial documents are stored and what’s in them is a great start.
Another 15-minute session should look at your investments. Have you accumulated too many bank accounts? Could you earn more interest and pay fewer fees by consolidating them?
Are you in the right superannuation investment option that matches your risk profile and stage of life? Is it time for both of you to visit a financial planner to talk about an investment plan?
Playing the financial future game
Once you’re both on top of your financial position, it’s time to think about the future, what you each want from it and how to afford it.
Here’s how to do it:
First up, put your phone on silent, put the kids to bed, clear off two horizontal surfaces (preferably not too close) and gather lots of blank paper and coloured pens/pencils.
Individually answer these questions and write the results down under three headings:
What do I NEED in the:
- next 12 months?
- next five years?
- when I retire?
Then …
What do I WANT in the:
- next 12 months?
- next five years?
- when I retire?
It helps if you have planned for this exercise and given it some thought.
Don’t hold back on what you want. Better to let your partner know now that you’ve always wanted a rural cottage, with chooks and a couple of horses, before they get too settled in that post-retirement inner-city terrace of their dreams!
This is your ultimate wish-list.
‘Needs’ are necessities. Things like rent or home mortgage payments, food, council rates, electricity and gas … you get the drift.
‘Wants’ are dreams and the little extras. Things like dining out, entertainment, holidays, car. This list should only be limited by your expectations and goals.
Remember now is the time to disclose those burning ambitions and secret purchasable desires.
Prioritise your Wants lists, with the top of the list being what you want most and the bottom being what you can most probably do without.
Then it’s show and tell time – you show me yours and I’ll show you mine.
Surprise, surprise! Shock horror? Or are you both on the same track? Sharing the Wants lists is usually the eye-opener. It’s highly likely there will be some surprises there.
So now discuss your wants. Discuss, but take care not to be judgemental of your partner’s ideas. This is not the time to ridicule any idea.
These lists will form part of your budgeting and, like all good budgets, they are not written in stone. They will need to be reviewed at very regular intervals and can be changed as your wants and needs change.
Start tonight. 15 minutes a month is not a lot to ask to think about your financial future.
Tell me how you go.
