Studies show that money is a leading cause of couples arguing, and it stands to reason. Whether married or in a committed relationship, couples are comprised of two unique individuals with potentially differing backgrounds and financial understanding.
This is particularly true in a distressed economy, such as we are facing with Covid. However, there are steps you can take to prevent money from ruining your relationship.
Tip: Check your financial health by clicking here.
Couples and cash
You must take time to understand how you each approach your finances, advises Shafeeka Anthony, marketing manager at JustMoney. In this way there is hope of finding a better way forward.
To open the discussion, JustMoney asked seven couples about how they manage their finances. To find out what they had to say, watch the video here.
It is evident that in many relationships there is a spender and a saver. There is often one party who runs out of money first, and another who sticks to the budget.
The way that people manage their money is highly personal. Big spenders enjoy brand names and the latest gadgets, and are likely to take greater risks when investing. Savers, on the other hand, read through ads for bargains, turn off the lights when leaving a room, and are risk-averse when it comes to investing. Shoppers get emotional satisfaction from spending up a storm, and can easily go overboard on credit.
When financial opposites attract, this can lead to fireworks. Arguments about money can quickly become intense. It’s easy to feel criticised, even if your partner’s comments are well meant.
“It’s important to remember that, no matter how much you have in common, your partner’s attitude to managing money may differ greatly from your own. This is shaped from a young age and is difficult to change. No one approach is necessarily right,” says Anthony.
Counting on credit
Couples considering borrowing would are advised to first check their credit scores. This is a tool that lenders use to decide whether you are a low or high-risk borrower. When you apply for a loan or credit, the bank or lender first checks your score and accompanying report. Your credit score not only determines whether you will receive the loan or credit, but also the interest rate you will be charged.
“Knowing your credit score is extremely helpful if, for example, you are a young couple and want to find out whether your dream of buying a home can become a reality,” says Anthony.
READ MORE: Should you strive for an excellent credit score?
Reducing the stress as a couple can be helped along with some basic tips to achieve financial success. One of these is avoiding bad debt. If more than a third of your income goes towards paying your debt, and/or you are worried and stressed, it’s best to seek help, and the answer may lie in debt consolidation.
READ MORE: Telling your partner about debt.
This form of assistance involves combining a number of individual debts into a single debt. This can mean, for example, increasing your home loan and using the extra cash to pay off all of your loans at a lower interest rate.
Couple and family finances
If you can reach a point of agreement on your financial goals, it’s a good idea to work out a household budget. JustMoney has a handy budget calculator that you can consult as a couple here.
Another helpful tip is to have a regular financial check-in. This needn’t be a long and serious discussion, just a chat over a coffee or glass (or two!) of wine will ensure you’re heading in the right direction.
Whatever means you use to find and maintain your financial harmony, communication is key.
“We all know that money is one of the biggest sources of conflict in relationships. People have different goals, different money styles and different levels of transparency. But financial compatibility can be achieved if we communicate with our partners. You need to be open with each other; talk about your goals and your challenges,” says Anthony.
“As with any aspect of your relationship, it’s important not to sweep money matters under the carpet. Deal with financial issues when they happen, together,” she advises.