Research conducted by Relationships Australia has found that financial distress is the number one cause of separation and divorce in Australia. Being able to be transparent, raise concerns and work through issues with your partner, however, can help to prevent financial issues from escalating to such a point as to negatively impact your relationship.
The following tips can help you to prepare for and manage conversations about money with your partner.
The first step sounds obvious but is often a struggle for many; it’s simply to not avoid having conversations about your finances, particularly when times are hard. Most couples avoid such conversations because they evoke strong emotions, which can get in the way of reaching productive resolutions. Ignoring conversations about your finances won’t solve any issues though, or help you to plan for the future.
Before starting conversations about your family’s finances with your partner, try to keep in mind your partner’s and your individual experiences. The families in which we all grow up and the ways in which our families managed finances, has often strongly impacted on our own personal perceptions of how to manage our money. With that in mind, proceed with any conversation with empathy and understanding.
Don’t start financial conversations during a disagreement or when one person is frustrated about money, as this could lead to further arguments or blaming. Rather, set a mutually agreed time and come prepared to have a productive conversation about your current situation in a calm manner. You could even set a goal for the conversation. e.g., “By the end of our conversation we will have a budget drawn up”.
If your family’s financial situation has been impacted by COVID-19, it’s a good time to re-evaluate expenses, prioritise what’s important and set achievable goals which you both contribute to and agree with. This might mean making decisions about how you can reduce expenses, or trying money-saving activities such as meal planning and buying less takeaway, tracking your spending, and using credit cards less to save on interest repayments.
The changes you make to your family’s budget may be temporary or long term depending on your individual circumstances. Keep re-evaluating your situation and remain realistic, so you can be flexible and secure the financial health of your family.
It’s easy to get frustrated when you and your partner aren’t on the same page about money, but blaming one person for your family’s financial stress won’t lead to change or progress. When establishing your joint priorities and goals, try to stay focused on the numbers (your finances) and talk about each other’s attitude to money, ensuring both of you are involved in the discussion.
Be mindful of the language you use when discussing money and try to use shared language by using terms like “our money” rather than “your money” and “my money”. As you’re both making changes to your budget, encourage and support each other, including during the more difficult or stressful financial times.
When developing a budget, clarify what you’re choosing to prioritise and sacrifice, and discuss any concerns and hesitations you have. Be clear as to why a budget is needed and commit together to this new way of spending money. Once you’re both in agreement, stick to your new budget diligently, and set a time in the future to review how you’re tracking and to discuss any changes that might be needed.
There are a range of services and online resources available to assist you with your finances.
Relationships Australia Victoria has more than 70 years’ experience supporting Victorians. We’re still providing counselling and other services during COVID-19, including through telephone and video appointments. Contact us for more information.
To access all our available tip sheet resources, click here.