Money can cause arguments between a lot of couples. Photo / 123rf
Money can cause arguments between a lot of couples. Photo / 123rf
Money makes the world go around but it also causes stress, anxiety and conflict between many couples. Financial experts say those who can conquer their emotions and talk openly and honestly about money will have better relationships. Carmen Hall reports.
Talking about money is not easy and canbe a “passion killer” and many conversations are needed – not just one.
Retirement Commission personal finance lead Tom Hartmann.
That is the view of Retirement Commission personal finance lead Tom Hartmann, who says the more people open up and talk about money the better their lives and relationships will be.
“Not talking about money can be a source of stress, anxiety and unnecessary problems for many families. Getting on the same page means we can set shared goals.”
Separate or combined finances?
To merge or not to merge finances was a highly personal decision, with positives and negatives, Hartmann said.
“If your income levels and/or attitudes around money are very different, retaining individual finances might be the best bet. But if a couple is on the same page about money, pooling resources is possibly the more streamlined and beneficial option.”
Partnering up creates riches beyond what we could ever accomplish on our own.
“If there are two incomes between us it’s obvious, but even a breadwinner in a single-income couple will have their partner’s invaluable support and accomplish more in their career than they ever could on their own.”
The commission’s latest survey shows that 45 per cent of participants combined finances, 41 per cent were was a combination of combined and separate and 14 per cent had completely separate accounts.
Cost of raising a child
Theoretically, couples without children should be able to leap ahead financially, Hartmann said.
But this depends on their financial capability – their ability to make sound financial decisions to grow their position over the long term.
The cost of raising a child varies. Hartmann is aware of estimates as high as $270,000 per child to age 18.
He said $270,000, could compound up to $540,000 in a balanced fund over 20 years and grow to about $760,000 over 30 years.
“Of course, parenting brings other riches than material.”
‘Treading water’ before EPA pays for money coach
Rick Hopcroft said his family often lived “hand to mouth” despite earning good money.
“It was a real struggle for us and as things got tighter, including our interest rates going up, which was massive ... things just got even harder.
He said $75 a week pocket money for him and his wife “has saved our marriage multiple times”.
“That was our sort of no-argument zone. I invested about $40 a week into Sharesies and built up a portfolio. Melissa would buy clothes.”
But last year the couple realised they were “treading water” and a lot of their income had gone out the door.
“We were not even sure where it was.”
After failed attempts to budget, Hopcroft got help from money coach Shula Newland last year through his Employee Assistance Programme at work.
The free financial counselling was “fantastic” and enabled the Hopcrofts to work together.
“It’s just been awesome ... we can grow our financial goals.”
They also sold their home and upgraded it in hopes of capital gain in the future instead of buying a rental property.
‘Money plan could be life-changing’
Money coach and author Sylvia Bowden has helped many couples and said a money plan could be “life-changing”.
This included one participant who did a CAP Money Course and said: “My husband and I have been married 30 years, and this is the first time we have been on the same page financially.”
Not planning and sticking to the plan can cause “financial and emotional chaos” especially when couples have unmanageable debt.
“This can also lead to separation.”
She was also aware of money conversations that ended in conflict, “sometimes progressing to domestic violence”.
Shula Newland, Full Balance Financial Coaching. Photo / Alex Cairns
‘More people in precarious situations’
Full Balance Financial Coaching founder Newland said where people were at with their relationships influences their finances.
Combining day-to-day finances may not be the smartest idea for couples early in a relationship.
“But you know if you’ve been together for a long time, you’ve got kids and you’re planning your life together then combining your finances is really important. So you can start thinking and working together like a team.
“There’s no I in team. Sometimes you can’t do that because the other person doesn’t want to combine them and you might have to just live with it. But that’s the ideal situation.”
Talking about money could be an “emotional trigger”. Triggers may come from childhood, previous relationships, shame, feelings of judgement, different money personalities and risky financial behaviour.
Newland said she was seeing more people in precarious situations.
“I think it’s really starting to bite because people often don’t go and get help until they’re in real pain ... a lot more people are in financial situations needing intervention. And we need to make sure that they’re not going to lose assets and go down the gurgler.”
Couples should get to common ground which includes talking about the bigger picture.
“Be positive ... regardless of where they are now. What are the dreams and aspirations and how do we work together for that? When you’re feeling good about your goals, you can then start looking at the nitty gritty of okay, what’s our plan?”
Newland’s business had access to funding from the Employee Assistance Programme so help doesn’t even need to cost anything.
Money issues ‘amplified’ when times are tough
Bay Financial Mentors general manager Shirley McCombe said the organisation works with a lot of couples and the challenges were different each time.
Shirley McCombe, general manager at the Tauranga Budget Advisory Service. Photo / Alex Cairns
Money was the source of many arguments and “when times are so tough it is amplified”.
“People have very different relationships with money. Some are very private and don’t want to discuss it. Some have a love-hate relationship and never really take control of their money.
“Some feel very resentful about having to share their money particularly if one is not working.”
Being open and honest meant the load was shared and you’re heading in the same direction.
‘Nothing worse than being blindsided by your partner’
Rotorua Budget Advisory Services manager Pakanui Tuhura. Photo / Andrew Warner
Rotorua Budget Advisory Service manager Pakanui Tuhura said there was “nothing worse than being blindsided by your partner with a large bill when you were planning on using the money for something else”.
“Working together and making compromises for the good of the household is important. It is way better to have a simple, logical discussion than an all-out emotional rollercoaster of an argument.”
Tuhura said if people were in financial strife, “the longer you wait, the fewer options to remedy that downward slide you will have”.
“Remember that money is a logical subject and usually reacts badly to emotion. By seeing us you will hopefully be able to alleviate the unease and feeling of lack of control over your money.”
