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Money not romantic, but necessary
By David and Libby Koch
News Limited newspapers
August 24, 2009 12:01am
Issues … Financial problems are the single biggest reason for relationship breakdowns, so talk about it, say David and Libby Koch / File
YES, it may seem unromantic to talk about money when it comes to the person you love, but money problems are the single biggest reason for marriage and relationship breakdowns.
Money can’t buy you happiness but the lack of it can stretch a relationship to breaking point, and there is growing evidence that the fallout of the global financial crisis is having that impact on an increasing number of Australian families.
That’s why both partners in a relationship need to be on top of the family finances.
The danger is that one partner takes responsibility for the finances, leaving the other partner incredibly vulnerable if there’s a sudden break-up.
Both partners must be able to protect themselves. It seems a sad fact of our stage of life that many of our friends are separating as the kids leave school and the couples realise they’ve grown apart and don’t want to be left with just each other.
It’s traumatic, but we’re shocked at how many wives are left so financially vulnerable and how few have a firm grasp on the family finances. The first step is to talk regularly about the family finances.
Set aside half an hour a month (that’s all it takes), grab a glass of wine and just talk about money. Where’s the money coming from, where’s it being spent, what about future expenses, what’s happening to the superannuation, insurance issues, bank accounts and credit cards?
Think of it as a financial ‘‘date’’ between the two of you. We spend so much time talking about kids, family and work that we often don’t focus on our financial health. Some people can be embarrassed about inquiring about the family finances if their partner has traditionally looked after the cash.
They don’t want it to seem as though they don’t trust them. If this is the case, explain you trust them implicitly but you’re just protecting yourself and the family from disaster if they die suddenly. If you trust each other, then there is no problem with formalising that trust by keeping each other informed about financial decisions.
How do you manage finances in your relationship? Tell us below.
In our relationship Libby looks after the day-to-day household expenses and bills while David manages investments. Together we set a monthly expense budget and saving plan and have a monthly financial date to talk about absolutely everything.
We also have several golden rules:
• When you have to sign papers, it is better to be one day late than to lose everything in five years’ time just because you were too busy to read the small print. This is as relevant for simple matters, such as reading the guarantee documents on a newly purchased electrical appliance, as familiarising yourself with the conditions of use on a new credit card or opening a bank account.
• Know where the money is coming from and where it is going. If you are a single-income family, the homemaker should know how much is being earned and what the bills are. Money should always have a source. If it doesn’t, then it’s possible there could well be something underhanded going on.
• If you have a joint account with your spouse, make sure the bank does not allow any cheques above a certain amount to be paid unless they contain joint signatures.
• Look carefully at how you buy assets – single names, joint names, their name, your name? It could all be extremely relevant for both tax purposes and if the relationship splits.
• If you are asked to sign something, make sure you understand what it is. Sometimes you could be asked to put the family home up as collateral for a loan. The price of loyalty can be your own and your children’s well-being. When you think about it, why should one spouse have the responsibility of worrying about the family home. A marriage is a partnership.
• If you have signed documents as part of a business agreement with your spouse, make sure you receive duplicate copies of any correspondence sent to other directors of the company. Always insist on the bank doing this with account statements, letters, copies of contracts. . . everything.
• Keep your lender informed about your activities if running a family business. Ameeting of all directors (you and your spouse) and the bank manager should take place at least once a year.
• Don’t define a marriage as just a romantic liaison, it is also a business and should be run like a partnership. In a successful small business everyone should know what’s going on. If you don’t, it is a recipe for disaster.
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