At a political and economic level, we all know that those who control the money have the power. In personal relationships, it is no different. Control over money can be used either in a beneficial or detrimental way by one person to control another.
The way in which money is managed in a relationship very often signals the underlying nature of the relationship. In some instances, one partner may refuse to participate in managing money. This may be for a variety of reasons.
Sometimes it is because the person wishes to retain complete financial independence and do what they like with their own money whether the other person likes it or not. At the other end of the spectrum, it can be that one person is afraid of managing money and is happy to leave it all to the other person. There are many variations between.
An unhealthy relationship with regard to money is one in which a partner is kept in the dark on money matters despite being keen to know; one person refuses to talk to the other about money or to reveal key information such as their income, or where one person is forced to sign financial documents without understanding the meaning of the documents or the consequences of signing.
Sometimes, where there is significant wealth involved, it may be held in companies or trusts involving third parties without full information being disclosed to the shareholders or beneficiaries.
In a healthy relationship there is full disclosure between partners of financial information, there is a willingness by both partners to participate in managing financial affairs and there are agreed financial goals which are achieved through co-operative behaviour and sharing of financial resources. Ideally, partners should aspire to having similar levels of financial literacy.
Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free by calling 0800 273 847. For free e-books see moneymax.co.nz and moneymaxcoach.com