Financial responsibility requires that you ensure full alignment with your partner on money matters. If you are married or in a relationship, it means you are in a serious relationship and you should ensure you have the ‘Money talk’. ‘Money talk’ is a conversation where you discuss your financial goals and your vision for the future. It is a conversation that helps you understand your partner’s financial preferences, strengths and weaknesses.
With this understanding, you can jointly work to leverage on each partner’s strengths while improving financial discipline where weaknesses exist.
In this article, I will share some tips to help readers understand and work better with their partners on money matters.
1. Understand your partner’s personality and preferences
When two people meet and choose to marry, they often come from different backgrounds and certainly have different personalities and habits. Relationships last longer when money issues are not allowed to cause conflicts. On the flip side, when money problems arise and are not properly managed, they can cause the breakdown of a marriage. Therefore it is very important to discuss and understand fully the expectations of your partner as far as finances are concerned. It is often said that opposites attract, this means that the strength of one partner is supposed to augment the weaknesses of the other. It is important that young people considering marriage ask some key questions before making their relationship permanent. Some of these questions include:
How financially literate is your partner? Does he/she understand the basic money concepts that guide good money decisions? Does your partner like only items with luxury branded names whereas you are satisfied with best value irrespective of the name? Will your partner insist on expensive holidays when you would rather save up for your new home or pay up your mortgage? Is your partner overly conscious of his/her friends’ achievements and spending preferences? Does your partner like to dine out at every opportunity? How indebted is your partner?
These questions are not intended to break relationships but to help in providing a good foundation for lasting relationships. Responses will help you understand your partner better and identify where he/she needs help.
2. Plan and budget together.
The most effective tool for couples to have alignment in financial matters is to draw up a financial plan and jointly work on a budget. A plan will give you direction on where you both want your finances to be in the short, medium and long term. A couple in courtship should have that money talk and identify their financial goals. Once you agree on where you want to get to financially, your budget takes a cue from this position. For example, this will help you place a limit on how far you want to spend on the wedding ceremony and once you are aligned, you both can insist on this limit irrespective of family pressures. For married couples, the benefits of planning and budgeting together cannot be over-emphasised.
3. Your partner is your accountability partner
What does it mean ‘To hold someone accountable?’ It means the person is being asked to explain why they did (or didn’t do) something. Most financially successful people have accountability partners and for married people, their first accountability partner is their spouse. When you must explain your financial decisions and choices to your partner, you are more conscious of the implications of your decisions and more prone to choose wisely. You are also able to discuss the choices ahead of taking the action and able to consider options jointly. When you work as a team, your chances at winning increase. Your partner is also more likely to be effective at helping you drop bad money habits and help you adopt better habits. You can also learn from yourselves.
4. Communication is key
It is very important to ‘actually TALK’ and discuss your money matters. This dispels any assumptions and helps you to be on the same page with your spouse. Expect that there will be some disagreements when discussing the money plan and during the actual budgeting process. However, whatever disagreement will pale out in comparison to the future benefits of the plan and budget you build up. Ask your partner direct questions on his/her sources of income and volunteer yours too. Your financial freedom is incomplete if you have financial discipline while your partner is reckless. Your financial success is assured where you both have the same financial priorities and goals regarding spending and saving.
5. Transparency and honesty is key
There should be no pretences from the beginning of a relationship to when such a relationship becomes a marriage. You should let your partner know what you are worth. If you have loans, be truthful about this and your plans to repay. True love will shine through irrespective of what you own or owe. If your partner only respects or loves you because of what you earn, then you want to check this. My point here is; DO NOT pretend to be what you are not to your partner. Let him/her know your financial circumstances – i.e. where you work or not (i.e. that you are job hunting if that is the case). When you lay the truth on the table, expectations from you are reasonable and more realistic.
6. Joint Bank Accounts or not?
Not all marriages will thrive on joint bank accounts and not all marriages will thrive on separate bank accounts. There are different models that work for different couples. Ensure you discuss and agree on a model that you both understand. There are 3 commonly used models that couples work with. Some people have joint accounts in both names with both parties having full access to all the accounts. Others have joint accounts where both parties must consent for any withdrawal out of the accounts. A third option is where the couple maintain their individual accounts while they create a ‘family project’ account to take each partner’s contribution to family projects and bills. Whatever concept you choose to adopt must be acceptable to both parties in order to get full commitment from each partner. Having joint accounts must be done willingly and no partner should be forced to do this. What is important is that you both discuss and agree how your financial goals will be met. It is also important that you both know your joint expenses and how you plan to settle them.
7. Your finances are not your parents’ affair
This tip will be useful to young couples intending to get married or newly married. If you want your relationship to last, then keep your money matters between yourself and your spouse. The state of your finances is not an issue for your parents to manage or take control of. Your relationship is your affair. You should not bow to parental pressures dictating how you should spend your money. Suggestions on location of your first home, extent of financial commitment to the wedding ceremony or the kind of car you should buy must remain as SUGGESTIONS! If you bow to pressures that have financial implications beyond your capacity, you are setting your marriage up for failure.
Bimbo Komolafe FCA, FCIB writes from Lagos. She has over thirty years’ experience in finance and business and has a passion for seeing people succeed in managing their finances.
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