Yahoo Finance Top five financial tips for couples
About 41% of married couples have said they can’t be happy unless they are financially secure, while 24% have said they frequently argue about money, according to a study by Fidelity International.
Some 22% also said they are extremely or very stressed about their financial situation and while 55% believe their household financial situation will be better in the next 10 years, this sentiment has dropped by four percentage points since lockdown
Only about a quarter (26%) of married couples could cover more than six months of household outgoings if they lost their primary income.
With this data in mind, Emma-Lou Montgomery, associate director for personal investing at Fidelity International, offers some financial tips for couples.
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1. Be open about finances and goals
“When you’re in a couple it’s only right that you discuss your future financial hopes and goals and set in place realistic plans to achieve them. Knowing not only exactly what state your finances are in, but also those of your partner too, places you in a very strong position for a bright financial, and marital, future ahead,” said Montgomery.
She added that trust is a huge part of any relationship and being cagey or secretive about your finances could mean trouble in the future.
2. Understand if you are saver or a spender
“Some people are spenders and some are savers, some fall into the middle ground and some are prone to veer erratically from one to the other,” notes Montgomery.
But that doesn’t mean you can’t still have shared financial goals, in fact it might even be a good thing.
“Don’t panic if you find you have completely different attitudes to money. It doesn’t have to sound the death knell for your long-term future. On the contrary it can actually be beneficial and bring some financial balance to your relationship,” she said.
Montgomery explains that “if one of you is a saver and the other a spender you could keep separate bank accounts as well as having one joint account that you use for all shared expenses. This is a good way to prevent your money differences from driving you apart. You can also use differences to your mutual benefit – sharing saving habits and smart spending tactics – to get the best of both worlds.”
3. Saving up is crucial
“If the past year has taught us anything, it’s that the worst can – and does – happen,” said Montgomery and that is why it’s important to have regular savings and investment plans going, for instance with a stocks and shares ISA (individual savings account).
Losing out on six months, or a year or two, could have a detrimental impact on longer-term financial security. But by setting up a set regular savings plan, investing becomes “automatic and stress-free and comes with the added benefit of spreading any risk. The key is to remain focused on your longer-term plans,” she said.
5. Be honest about debt
“An astonishing number” of people haven’t told their partner the full extent of their debts, and according to relationship charity Relate, some 14% of those in debt say they have kept it secret from a partner, said Montgomery.
“If you’re one of these people with a secret, it’s time to come clean. Suddenly finding out your spouse has thousands of pounds worth of debt can put a strain on any marriage.
Also, if a partner is added to an account on which the other has been “delinquent,” their credit score will be adversely affected.
Similarly, if one is added to the other’s account on which they have debts, they will become jointly liable for paying off those debts. And if one defaults, the creditor can choose to come after the other for the entire debt, even the amount the spouse was carrying before the other was added to the account.
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