When I meet couples to talk about their finances, I often find that one of the parties is much more engaged than the other. In relationships, it’s often one party that deals with the finances, while the other one shies away because they are not interested or, more often, because they find it hard to talk about.
It’s not just my clients who sometimes struggle. Research from M&S Bank has revealed that only 17% of people in a relationship regularly talk about finances with their partner. More than one in 10 are apprehensive about discussing debts, do not share how much they earn or know details of their partner’s wages.
Psychologist Emma Kenny says: “The findings show that money can be a taboo subject in some relationships. However, it’s healthy for couples to discuss their finances and it’s important that they engage in open and honest conversations about financial goals and ambitions from the start.
“In fact, this is often the key to a successful relationship. While how much a person feels comfortable disclosing is down to the individual, we would encourage people to talk more about money with their loved ones.”
It’s really hard to put a financial plan in place if only one party is privy to it (or interested in it). In my experience, if I only deal with one party, it’s more difficult to get them to take action as the other doesn’t have the same level of buy-in.
Discussing financial matters doesn’t have to be confronting or difficult. Here are four tips that might help when it comes to talking about money with your spouse or partner.
1. Make a specific time for a conversation
Relationship support charity Relate suggest that you treat a conversation about money ‘like a business meeting’. They say you should approach your finances as a purely practical matter and try and talk to each other like adults.
It can be a good idea to make a specific time for a conversation about money, and to make sure that you’ve got figures available in advance. Set a time each week or month to keep each other updated about your financial situation and, importantly, how you feel about it.
Discussing matters regularly can prevent arguments, and it helps you to be open and transparent with one another.
If you think this approach might not work for your relationship, consider working with a financial planner. They can keep your financial situation on a business-like footing and act as a coach and sounding board.
2. Look at the bigger picture
Money conversations can often be about small issues, such as day-to-day spending or saving. However, there can be huge benefits to working together as a couple on some of the ‘bigger picture’ issues.
For example, when one partner is the main breadwinner, valuable tax advantages and opportunities are often missed. One of you may have an unused Income Tax allowance whilst the other is being taxed at a higher than necessary rate, or perhaps you haven’t taken full advantage of your Marriage Allowance.
Working together can also help you to draw pensions tax-efficiently, and to extract profits from a family business without paying too much to HMRC.
Again, working with a financial planner can help you formulate a long-term financial plan that benefits both of you.
3. Be sensitive to your partner’s relationship with money
Everyone has a different relationship with money. Often this is linked to the way you dealt with money in your childhood, or the ways in which your parents tackled financial issues.
Allison Kade, a millennial money expert, told Business Insider: “A great deal of our opinions and attitudes about money come from our family.
“So, a great way to start understanding where your significant other is coming from is to understand his or her upbringing — and you can start with conversations about your childhoods.”
I’ve met clients who feel guilt, or even embarrassment, because they have all the money they need. Other clients have experienced severe money problems in the past – perhaps they even lost a business – and their attitude now is driven by a desire to never let that happen again.
As far as your partner is concerned, there may be factors which are the root cause of their reluctance to get involved with the household finances. It might not be apathy. Only by exploring their relationship to money, and being sensitive to it, will you be able to move forward together.
Ask questions such as “Were your parents particularly strict?” and “Did your parents fight a lot about money?” to open up a conversation.
4. Collaboration is more important than ‘joint’ everything
There’s no right or wrong way to devise a financial plan. You may have a particular idea of how you’d like your joint finances to work. Your spouse or partner probably has their own ideas, too.
The important factor here is collaboration.
Some couples have ‘joint’ everything. All their income and expenditure is pooled, and they use joint accounts for their banking and saving.
Other couples keep separate accounts, and only come together when they are saving for a joint expense. Or perhaps they keep their own bank accounts but have a pooled account to pay household bills.
It’s important to remember that there’s no correct solution. You have to find an arrangement that works for you both, remembering that it’s the collaboration you’re looking for. Whatever form that takes, it’s better than none at all.
The same goes for financial planning. Clients who collaborate can take advantage of a huge raft of benefits, from making the most of tax allowances to benefiting from greater tax relief on pension contributions. Only by working together can clients make the most of their money.
Get in touch
Independent financial advice can support you when it comes to talking about money. When you see a financial planner, make sure you go together and talk about your priorities as a couple.
Your planner will recommend an approach that suits you both, and you’ll end up with a clear financial plan that addresses both your needs and personalities equally.
If you want to have a chat about your financial plan, or you’d like advice on meeting your goals, please give me a call on 07769 156 250.
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The Financial Conduct Authority does not regulate taxation advice.