MONEY SPACE?
WHY SEPARATING YOUR FINANCES COULD HELP YOUR RELATIONSHIP
Relationships and money can be tricky. Who pays for what? Who spends what? Do you feel your partner overspends? Are you the one who spends more than you should? These are tough questions as there is a lot of emotion and feeling attached to the answers.
Having to tell your spouse or partner you are in debt or have suffered from financial loss is one of the hardest things you’ll experience. The strain of knowing your past decisions don’t just affect you anymore but also someone you love can be debilitating.
TALK, TALK AND MORE TALK
A recent survey from the US found that 94 per cent of respondents who described their marriage as ‘great’ said they discuss their money dreams with their spouse, compared to only 45 per cent of respondents who describe their marriage as ‘OK’ or ‘in crisis’. Most of those who reported having a great marriage (87 per cent) also said they and their spouse work together to set longterm goals for their money.
The takeout from this is that you and your partner don’t need to have identical outlooks, however communicating as a team works wonders. This calls for you to be able to discuss money in a constructive, non-judgemental way.
Identifying your attitudes to money management is worth doing, even in the early stages of a relationship.
You’ll be better able to understand each other’s perspective and have constructive conversations that support your relationship, rather than letting money issues fester.
WHAT IS MONEY SPACE?
Being part of a couple doesn’t mean having to share everything. A generation ago it was common for couples to have just one joint bank account where they pooled all their resources.
The data in 2022 however shows that less than one in two (44 per cent) of Australians are happy to share 100 per cent of their finances with their significant other. One in three have some shared finances but maintain a separate bank account with independent funds. One in five Australians choose to keep their finances separate from their partner. And most maintain individual superannuation accounts. This is ‘money space’.
Now I want to stress here there is no single right or wrong way for couples to manage their money. Nonetheless, something I have seen work well is the idea of a ‘me’ account: an account or savings vehicle where you hold an amount of funds for no-questions-asked personal use. So, if you want to buy a new bike or that new pair of shoes, you can. The idea is that the funds in that account are yours to spend, and you can be secure in the knowledge that doing so won’t affect your partner, family or overall wealth.
For more financial know-how, check out Evan’s new book, Mind Over Money ($32.99, Major Street Publishing).