Couples need to communicate about money

It’s well-known that poor communication can damage a relationship, and if there’s one subject that couples don’t like talking about, it’s money. A video on the Bloomsbury Wealth YouTube Channel.

Connect with us:
Twitter
LinkedIn
Facebook
YouTube

Transcript: Robin Powell and Iona Bain/ Financial author

RP: It’s well-known that poor communication can damage a relationship, and if there’s one subject that couples don’t like talking about, it’s money. Here’s the author and blogger Iona Bain.

IB: Couples can build up so many problems in their relationship by being secretive about money. Studies consistently show that money ranks as one of the highest factors – if not the highest factor – that drives divorce and relationship breakdown. That itself can be really harmful for individuals and their finances, especially if they’re a woman.

RP: Communicating about money is especially important at the start of a relationship. Getting married without having a frank discussion about it is certainly a big mistake.

IB: Couples need to establish, at an early stage, if they share the same values when it comes to money and if they can successfully work together to overcome any differences or problems they might encounter. Otherwise, they risk tying up their finances and their lives together without knowing the first thing about their spouse’s financial background, attitudes, and habits. That can lead to financial disaster – as couples can be jointly liable for any debts built up, and it can also create so much tension and heartbreak that you could really do without.

RP: We all have different views about marriage and relationships. But Iona Bain recommends that all couples committing to a long-term relationship should ideally have a legally binding agreement.

IB: Couples need to come up with a financial plan that will cover things like, what will happen if they break up, and how would the bills be paid? It’s particularly important to have an agreement if you buy a house together, and you have joint liability for a mortgage. You’ll also need to agree on what parts of your finances you’ll share, and what you’ll keep apart. The most important thing is that you both see eye to eye on this plan and, where appropriate, that it’s legally binding. If in doubt, especially when it comes to any discussion of assets like housing, you need to make sure a lawyer looks over your agreement. While all this might sound somewhat unromantic, remember that you’re doing it to be responsible to the other person and to protect yourself and your relationship.

RP: Another thorny issue is whether couples should have separate bank accounts. Again, not everyone will agree with this point of view.

IB: It’s inevitable that couples will have some disagreements about money, and you may not spend money in quite the same way that your partner does. That’s totally normal and healthy – but I think one effective way to reduce tension in your relationship is to have separate accounts for spending. Many couples today feel that they don’t need to share absolutely everything with one another; and that paying essential bills from one joint account, but keeping separate accounts for spending, can be a way to reduce unnecessary conflict. Also, it might help both partners to feel like they have some individual freedom and autonomy, which I think is a really healthy thing in any relationship.

RP: There are no universal rules that apply to all couples. What works for one couple may not work for another. But however you decide to arrange your finances, communication is key to a stable and healthy relationship.

Disclaimer — The information in this video does not constitute advice or a recommendation, and you should not make any investment decisions on the basis of it. If you do however require advice please do not hesitate to contact Bloomsbury Wealth.

 

Tags: