It’s a no-brainer that money causes tension in relationships, but what’s surprising is just how frequently Australian couples bicker about dollars and cents. Whether you’ve been hitched for years or you’re starting a new relationship, make sure you take a practical approach when managing joint accounts (and financial goals).
A new finder.com.au study asked Australians how often they argue with their partner about money and showed more than half of Australian couples (52%) fight over money at some point.
It turns out the most common frequency to argue about money is every three to six months, with 18% of respondents admitting to arguing this often. A further 16% have a financial row with their other half every two or four weeks, while 11% argue about money just once a year.
What’s really startling is that 7% of couples have weekly quarrels about money.
Whether it’s splurging or reckless spending, forgetting to pay a utility bill, or getting multiple parking fines, there are a million things that can cause a money-related row.
While money arguments can’t always be avoided, there are ways you can better manage your finances with your partner, so keep the following in mind:
Nominate who will manage the account/s.
Having joint bank accounts can make financial sense as it means you can better track joint expenditure and you can also save on the account-keeping fees that you would otherwise pay on individual accounts. However, joint bank accounts are only useful if you use them correctly. Decide who will manage the account in terms of authorising transactions and meeting account terms.
For instance, if you need to deposit $1,000 into the account and make no withdrawals for the month to earn bonus interest, decide who will be responsible for setting up an auto transfer. Also, decide who will review your statement summaries each month to make sure everything adds up.
Set yourself a savings goal and roadmap.
Depending on the nature of your relationship, it’s likely you’ll be saving towards something - such as a holiday or a home deposit. Sit down with your partner and discuss your savings plan and the tactics you’ll employ to achieve the savings target. For example, if you’re saving for a home deposit and you need to save $100,000 to put towards your down payment, make sure you set yourself a detailed plan and timeline of how you’ll come up with the funds.
You can use an online budgeting calculator to give you an idea of how much you’d need to put away each month. As part of your budget planning, you’ll also need to come up with the ‘roadmap’. That could involve earning interest through a high-interest savings account, selling your car for extra cash, or even renting out a spare bedroom in your property.
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Keep the lines of communication open.
Being upfront and transparent about your spending behaviour and shared financial goals is crucial. Set yourself a spending limit for key items such as groceries, transport and entertainment. You should also make a rule that you’ll tell each other once you make a transaction that exceeds a certain threshold. For example, you may make an unwritten rule that if you spend more than $150 on an ad-hoc expense, you’ll let them know about it.
Being honest with your spending (and saving) can make a big difference when it comes to ensuring that you’re both on the same page with your finances.
Have a contingency buffer in place.
You can’t plan for everything, so make sure you build up a contingency buffer of funds so you’re financially prepared when life throws you a curveball. This could be as simple as creating a separate ‘rainy day’ fund where you both contribute a set amount each month. Doing this will mean that less pressure is put on the relationship when (and if) something goes wrong.
Knowledge-share with one another.
Remember to keep your partner in the loop with your own financial knowledge so you can make informed decisions together. Whether you’ve learnt about how a mortgage offset account works, you’ve heard about a new/affordable internet provider, or you’ve decided to use your credit score to snag a better credit card deal, be sure to tell them all you know to empower you both.
Sharing your financial future with someone is part of life, but you need to constantly check in with your partner to make sure things are on the right track. Having a savings goal and roadmap in place, being a good communicator, building a contingency buffer and sharing nuggets of finance wisdom, are just some ways you can work towards shared financial goals.
Bessie Hassan is a money expert at finder.com.au.