12th February 2016 at 1:45pm
There comes a time in every relationship when couples need to cover the trickiest of topics. But far from monogamy moans or complaints about the dishes, it’s affairs of the bank balance that are causing Brits the most heartache.
According to data released by the Office for National Statistics (ONS), money worries are now the biggest cause of relationship strain in Britain, causing more romantic strife than affairs and household chores.
However with recent research from Standard Life revealing that half of British adults admit to ‘fibbing’ about their finances, most commonly to their partner, it’s perhaps unsurprising to discover that money is the reason why many of our relationships run into trouble.
Heart strings and purse strings
With Valentine’s Day just around the corner and romance on our minds, we thought it might be useful to share five top tips to make sure loves young dream keeps blooming and help you build for a harmonious financial future together.
Agree priorities and set a shared budget, then stick to it, even if you don’t have shared accounts. Knowing your partner has visibility over your monthly outgoings may help you to be stricter with yourself about overspending, especially if you have to own up to the reason why you have a gap in your savings and a new extravagant purchase hidden away.
Consider credit scores
Despite rumours to the contrary, there’s no such thing as a credit post code black list. But whilst sharing an address with someone with a poor credit rating won’t affect your own score, sharing an account with someone with a chequered credit history can. The reason for this is that lenders may assume that your fellow account holder could have an influence on your money at any time. This applies to joint loans and mortgages too. So it makes sense for both of you to check out your credit histories and have an open discussion about the best approach to take when it comes to credit – even if you’re loved-up, a joint account might not be right for everyone.
When we hide things from our partner (the new outfit or new golf club tucked away, or the true cost of new trainers or a new gadget), we can erode the good feelings in the relationship. Respect grows through transparency. While coming clean about your financial troubles can feel difficult, being upfront about debt, misguided purchases or a bad credit score means you can start making a plan to get back on track together. This open approach to money management should improve your household budgeting process and taking the time to discuss one another’s spending habits will help you to understand each other’s financial strengths and weaknesses.
Invest in your future
If you and your partner have money set aside for the long term, you might want to think about investing. If you do, make sure you talk about your attitudes to risk before you embark on a joint investment as you don’t want to invest your combined nest egg or house deposit in a high risk fund if your partner is only comfortable with low risk investments. Similarly, discuss where you want to invest your money and make sure your views on this are aligned if you’re investing together. Our research shows that, for instance, women investors are more likely than men to want to invest in companies that achieve positive social outcomes.
Talk about savings goals
Talking about your long term savings goals – whether that’s buying a house, planning a dream holiday or spending your later years together- means you can put a joint plan in place and remain on track to achieving it. This means you’ll have a shared vision of why you’re making certain choices – such as making a romantic dinner at home instead of dining out, or making homemade gifts instead of splashing out on expensive purchases – and will have something to look forward to together.
Invest in honesty
To quote the renowned author Mark Twain ‘honesty is the best policy – when there’s money in it’. Being open and honest about your money, just as much as you are in other aspects of your relationship, can be an investment well worth making.
The information in this blog or any response to comments should not be regarded as financial advice.