Why you need to stick together as couple now more than ever

Financially times are tough and it’s going to get a lot tougher. Many Australians overspent and over-borrowed during the golden years of the last decade.

It was easy. Money was cheap, the economy strong, jobs secure, share and property markets booming.

How times have changed. With that change comes pressure on family budgets and family relationships… and it’s going to get more intense for both.

Nothing puts more pressure on a relationship than financial stress.

The bottom line is can you as a couple work towards team finances, what is to be gained and what are the long-term benefits? Now, more than ever both partners in a relationship need to be working together to cope with the tough times ahead. Both partners have to be aware of the consequences and support each other.

If that’s not happening in your relationship now, start making the changes before the stress builds to breaking to point.

Just as you would in a small business, it’s best to have a business or strategic plan that you review along the way, particularly with regard to where the business partners have various responsibilities. Relationships are similar. You need to have a common vision of where you are going with your money and what your goals are… whether it’s to travel, pay down the mortgage or get on top of the credit card.

If you are the person with knowledge on how to manage money you may need to motivate your partner to become more disciplined otherwise you too may find yourself getting into arguments about your different approaches to money management. Sure, strains are going to be put on a relationship when there is simply not enough money to make ends meet. And there are obviously going to be problems if a penny-pinching miser gets together with a credit bingeing shopaholic. If a couple of spendthrifts get together they might walk hand in hand into bankruptcy.

If these issues aren’t sorted out there can also be unforseen, long-term consequences.

Psychologists say that the way we view money is largely determined by the way we were brought up. For example, some people come from families in which love and appreciation is showed by buying gifts, while others only buy the necessities and see too much gift-giving as frivolous and materialistic.

Given that’s it’s a known fact that opposites attract, it’s possible you’ve come from very different backgrounds. While all the other things may be working, it is actually quite rare for a couple to come together with exactly the same attitudes to money and spending. Usually one partner is more likely to be more constrained in their spending and the other more spontaneous

First step is being better educated financially. There is so much financial information written in simple language that this self-education will make you both far more comfortable about your own financial situation. Daily financial newspapers, press and radio all now offer daily financial summaries and regular personal finance segments. Monthly magazines give an overview and have relevant changes in legislation and articles of interest. Then there are whole sections of well-written, easy to understand books on money which provide enormous help.

Many of you have already read my “Kochie’s 11-step Money Plan For A better Life”… and don’t forget the new Ausbiz business and investment streaming channel… download from the App store.

Find a financial mentor. That is someone who you believe manages money well. If you want to keep your finances confidential, go outside the family, but if you are after basic information, seek as much free information as you can get. Remember, if you do ask advice you don’t have to follow that advice. Just add it into the mix of advice you are collecting. Once collected, as a couple, go through all this financial knowledge and advice and decide what will work best for you.

As a result you will both be equipped to understand advice from your financial institution, stockbroker, financial planner as well as those well-meaning parents and family. You will then be able to reach a well-researched decision on how best to manage your finances.

You are a couple, so it is important that you make financial decisions together. It may not be the end of the world if one partner comes home with their preferred brand of peanut butter, but it will have a lasting unfortunate financial impression if one of you blows the house-deposit on a vintage car.

I reckon the biggest thing I’ve learnt in all my years as a finance journalist is people on average weekly wages who are disciplined with their money end up with more wealth than those earning three or four times as much but spend the lot.

The question to ask yourself is: Are my finances presently disciplined or out of control?