Mixing love & money — The formula for success
HAVING basked in the wonder of Valentine’s Day yesterday, many couples are still on a high from the gifts received, the date night romance, and the intoxication of celebrating their love, even during a pandemic. Yet, while the romantic energy flows, there are some left feeling financially sore and potentially bitter about the expenses incurred and their partner’s expectation of an expensive gift or outing.
These negative feelings are sometimes the result of differences that exist between partners in the approach to spending, and can potentially damage relationships and reinforce the belief that love and money cannot mix.
Allison Morgan, branch manager,
Victoria Mutual Building Society (VMBS) and lead of the VM Group’s Transforming Banking Programme of Work project, weighed in on the potential for lasting damage to relationships due to lack of an understanding between partners about their attitude towards money.
Morgan, who boasts a strong 20-year career in the financial services sector, encourages people to be deliberate in seeking to understand each other’s mindset towards financial issues and what their lifestyle expectations and financial goals are.
Referencing her personal experiences, Morgan said having been traditionally risk averse, she had to develop strategies of compromise in her own relationship with her partner who is usually keen to take on new ventures.
“I learnt to be more open-minded and satisfy my own concerns by doing the necessary research so I can take a calculated and informed decision when supporting his ideas. We have grown as a couple through this approach and by communicating our differences; and have had success in our entrepreneurial pursuits as a result,” she said.
Adding that research indicates that money is the leading issue that couples fight about and the second leading cause of divorce, she highlighted the importance of discussing money early on in relationships and putting in place strategies that help couples achieve their shared financial goals, while maintaining the romance.
She shared some advice for couples:
Communicate your expectations
Morgan encouraged couples to have a measured and honest conversation about their finances in the early stages of a relationship, which can help them identify their habits, goals and anxieties around spending.
“Having a genuine conversation about what your lifestyle expectations are, what you hope to achieve financially, and being open about your own spending habits can make the difference in helping you and your other half come to an understanding.”
Keep a joint bank account
This idea may be controversial to some, Morgan said, but she believes that married couples and those in long-term relationships should have a joint bank account, as it means the two parties will be pooling their financial resources and ultimately strengthening the partnership. In order to maintain a healthy financial relationship, she said couples should be specific in setting rules for their monthly expenses and how the account will be funded. They should also prepare a budget and consult each other before any significant purchases.
Be honest about your debts
Surprise debt in a relationship can potentially be a huge turn off in a new or even longstanding relationship, as the other partner will likely feel the financial and psychological impact of large debts in the household. Morgan noted that with the adoption of a credit scoring system locally, it is important that people be upfront about their debt and how they will manage it effectively, as this can have serious consequences on the couple’s future financial standing and impact transactions, such as in acquiring a mortgage.
Get financial guidance from an expert
She further advised couples to consult their financial advisors for unbiased guidance on the best strategies to achieve their shared financial goals. While it may be difficult to have money conversations with a partner, an external party can bring clarity by helping the couple set goals, set out a budget and plan for the future, Morgan said.