Money management might seem like the most unromantic subject in the world but it’s essential if a marriage wants to start on the right footing. So, how do you broach it?
Words by Lum Yin Peng
Couples in love can talk about anything and everything, but financial matters seem to be last thing on their agenda. In fact, for many new couples, money management is a taboo subject. After all, you don’t want to be seen as being too money-minded to your significant other, right?
All the resources you'll ever need as an investor
We've gone ahead and done the work. Compiled here are all the resources you'll need as an investor.
Yet, surveys have shown that differences over spending habits and money management can put a real strain on any relationship. So, how do you even begin to talk to your partner about money?
Perhaps it’s important to firstly clear up one big misconception – that talking about money is being impersonal. If you really think about it, sharing about one’s financial situation is a very personal thing. Talking about money brings your relationship to another level of intimacy. In fact, it’s often the beginning of discussions on how you can harness the power of one whole versus just two halves.
When we were a young couple, my then-boyfriend (now husband) and I decided to open a joint savings account at POSB. We were still undergraduates and didn’t have a fixed income. However, both of us managed to each contribute a monthly fixed sum into the account from the money we got from giving part-time tuition. The amount built up through the years and we later used the money in this account for life expenses such as our wedding dinner and first apartment.
Looking back, I realised that this process revealed our individual financial values without us having to say a lot. We share similar habits and rarely had any disagreements over money management issues because our financial personalities are highly similar. Both of us are savers.
Are you and your partner spenders or savers?
I may be oversimplifying things but your financial personality can generally be shoehorned into two categories – spender or saver. A spender is someone who craves for the good things in life while a saver wants to live simply and frugally. In any relationship, it’s important to identify the financial personalities of you and your partner.
Most folks are not exclusively spenders and savers and tend to fall somewhere in between while leaning towards one instead of the other. Your partner and you will more often than not fall on different parts of the spender-saver spectrum. It’s normal because both of you are from different family backgrounds and have your own separate personal experiences.
There are no right or wrong combinations of partner personality types. Being somewhere in the middle rather than at extreme ends of the spectrum will definitely help to lessen any financial tension between you and your partner. Even similar personality types have their issues to deal with.
The couple with this profile usually hold similar views regarding money and its expenditure (or lack thereof): save, save, save! Life is a lot simpler for them. Their idea of a fun couple weekend may be cutting coupons and finding the cheapest deals in town or cooking at home and watching DVDs of classic films. They tend to agree on where the money should go – it’s usually into savings or investments.
Having said all of the above, any habit or behaviour that’s carried too far can also be detrimental. Couples with such personalities may fall into the trap of being penny wise and pound foolish. They may start being critical of each other’s spending, no matter how small. Such couple types may also need to consciously set aside time and money for their family and friends. The last thing you want is to destroy your relationships with punishing money-saving ways.
If the both of you are spenders, you may find yourselves living beyond your means. Taken to the extreme, this can lead to unnecessary debt and can have disastrous results not just for yourself but your marriage.
In some relationships, it can even lead to the deliberate covering up of expenses by one partner from the other. There’s even a term for that – financial infidelity. It describes any secretive act of spending, holding money or even incurring debt, with the intent to hide it from your partner or spouse.
The key to managing your money management issues is understanding that there might be a problem and then openly communicating with each other about these issues. If one or the both of you are in debt, you need to work as a couple and come up with solutions to how to manage your debt together. Refrain from pointing fingers and if neither of you are ready to take on the role of financial planning, it may be a good idea to outsource it to an independent financial planner. Couples who are able to overcome tough financial times together grow stronger out of such problems.
A spender-saver combination in a relationship is usually the most stressful and problematic blend. Red flags would have already appeared before marriage. One party may regularly question the other on extravagant purchases while the other chides the partner for being stingy. Sadly, sorting out these money management issues typically mutate to an emotionally-charged affair and can colour underlying issues.
For this combination of financial personalities, it is important to first acknowledge that money values and habits are shaped way before we meet our other half. To change money management habits shaped over a few decades is highly difficult. However, it is not entirely impossible! It will take multiple conversations with the least amount of defensiveness from both parties to make it work.
Talking about Money Management
Whenever my husband and I have issues over money, I find that at least one party has to be the objective one, separating facts from assumptions and constantly steering the conversation to the issue at hand. Then, we can finally come to some sort of a solution. Yes, even after twenty years of marriage and with similar financial personality types, we do have our differences!
If you find yourself arguing a lot and in circles when talking face to face, it may be useful to email each other or even writing an old-fashioned letter or journal. Writing and re-reading what you have written will definitely help to clarify the issues. It also makes you a lot more careful with what you say.
What Should We Talk About?
Start with coming clean about your finances to your other half and vice versa. With that done, you can work together to unify your budgets, cut down on frivolous and unneeded expenses, and save for the future. The both of you are a team. Work together to aim for mini financial successes, consolidate investments, clarify insurance needs, and ultimately, plan for retirement!
With Valentine’s Day just around the corner, give it a try – have an intimate discussion with your other half on money management matters. Hopefully, you’ll find a lot more in common than you think. If not, it may be a good time to re-align financial goals and values. Start somewhere. You will thank each other for it.