Money and relationships
It is great to feel like you have your personal finances under control. However, if you’re in a relationship, your personal finances are only part of the equation.
Over the years as an experienced financial advisor, I have seen that a mismatch of spending habits can cause significant pressure on even the most enviable of relationships.
Here are some things you could do as a responsible partner/spouse to ensure you avoid this:
Check your attitude
Firstly, get to know yourself. What’s your attitude to money and spending? Are you a saver, spender or investor? You can ask and seek feedback from your close family as they are more likely to be honest with you. This will segue into understanding your partner’s spending and coming up with balance.
Talk money with your partner
Understanding your partner’s approach to money/spending will make it easier for you to find harmony and make it easier for you to plan your financial future. Early in the relationship, it will be good to allocate or share responsibility of financial control—e.g. mortgage repayments, savings plan, credit card payments. I recommend that you put both names on utility bills as you will be equally responsible.
You are generally liable for any documents that you have signed, and that may be the case whether you’ve read the content or not. Do not sign anything before reading and understanding what you’re signing. You may not be able to use ignorance as a defense.
If your mortgage/personal loan/credit card is in joint names, this does not necessarily mean that you are only responsible for half the loan. If your partner defaults on the loan you may be liable for the whole loan (including related costs) even if the relationship ends.
No matter what your financial goals are, you’re more likely to achieve them if you both work together. Work out a budget together, and keep track of where you are with all your finances. Store all financial information in one place so you both know where it is. Ensure you keep your Wills and powers of attorney up-to-date.
If you don’t know where to start, you might want to get informed by seeking professional financial advice. One part of receiving advice is to really uncover your financial goals—a useful exercise for you and your partner!
The MoneySmart website has a wealth of information about money and relationships. If you would like to read more, head to moneysmart.gov.au/life-events-and-you/families/relationships-and-money
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