John Vaughan (Financial Advisor) @ Lucid Living
According to Australia’s Relationships Indicators Survey 2008, 35 per cent of divorced respondents nominated financial stress as the key issue in prompting the divorce which is sad, because the issues are often preventable.
The specific issues I have found to create conflict between couples are:
* The “What the heck did you buy that for?” issue. He likes PlayStation games, she likes shoes (sorry about the cliche) and their bank balance can only support one of those purchases. This can be solved with a written budget and a bit of discipline.
* The “You’ve overextended the credit card” issue. This happens when a spender and a saver are living together and only one person in the couple is taking responsibility for managing the finances. This requires a serious talk or counselling, a budget and a set weekly allowance for the spender.
* The “We don’t earn enough” dilemma. This requires perspective. Chances are that you DO earn enough, it’s just that you’re spending more than you need to. Go through your bank statements, check what your money is being spent on, then try to cut back.
“Spending too much and not earning enough, are symptoms, rather than the cause,” according to Lucid’s psychologist Kay Moodley. A “failure to communicate” is typically what causes marital money madness, because most people treat money as a taboo topic, Moodley adds.
Given so many marriages bust up over finances, couples need to spend time talking about money before the blue-ing starts.
Put the kids to bed. Grab a bottle of wine (or two), some paper and pens.
Now go back to the future. You started this marriage thinking about growing old together. Start there and work backwards.
Forget about today’s money issues. Focus on where you want to be in 30, 20 or 10 years from now.
Do you have similar financial visions? What sort of a retirement do you want? When will the house be paid off? How are you going to educate the kids? Is there a holiday home in the plans?
Then work back to today. You’ll probably be surprised at how little of today’s spending you need to forgo to get there and still have fun along the way.
If you’re not making financial love after two bottles of wine, then it’s time to see a professional (a financial adviser, or relationship counsellor) to get help.