Love and marriage might go together like a “horse and carriage”, but if your finances are not aligned, disappointment on Valentine’s Day is the least of your concerns.
Disagreements over financial decision-making are among the main reasons that married couples end up divorcing, warn financial planners. Addiction, adultery and abuse might be some of the biggest marriage fails, but disagreements about money or avoiding the topic altogether can have a devastating impact on a relationship and individual partners.
It’s the reason why engagement with an independent third party can ensure a better understanding about money relationships, help partners reach a compromise and protect the couple – both as individuals and a unit.
Because starting off on the right financial footing helps build a strong foundation for a healthy relationship.
Janine Horn, financial adviser at Momentum Financial Planning says she believes in financial planning before marriage, because couples need to understand how each one works with money, how much debt the other has and what their goals are before signing a marital contract.
“We need to speak about our background, whether there’s depression or privileged behaviour around money, about where you come from and what behaviours you were taught as a child. In many families, there’s the expectation of black tax. Are you a spender and do you attract debt?”
Speaking about money over Valentine’s Day is not a cliché – Horn believes it should be spoken about much more.
“Date your partner financially – if I speed-dated you and asked you questions about your family life, whether your dad’s a spender or an alcoholic, were you taught about investment or saving? And then there’s the question of how do we compromise?”
“It’s easy for couples to end up in a power struggle over money,” said Sharon Moller, a lifestyle financial planning coach at Old Mutual Wealth. And if one partner falls into the “bad cop” role, the other becomes defensive, causing resentment on both sides.
Because finances are so critical to a relationship, Moller says most of her planners won’t engage with clients if their partners are not with them in the room. “If your spouse is not part of it, then it won’t work. But it’s always assumed that the spouse knows what you want out of life.”
Old Mutual Wealth has 12 “integrated wealth” coaches around the country, looking after about 400 lifestyle financial planners. “It’s a specific skill and philosophy. Typically, financial planning is about products and best funds. That conversation exists but planners are now stepping into a world where they are coaching their clients, looking at the triggers – it’s not all about the financial performance of an investment, whether you have enough insurances or savings, and other products.”
In the most recent Momentum/Unisa Household Financial Wellness Index, only 38% of financially well households were found to have a financial plan.
Horn says she had seen too many couples enter financial planning too late. “Having a shared financial plan doesn’t mean losing your financial freedom but it means identifying where your financial goals align and co-creating a shared roadmap to get there. There is no substitute for the right advice, especially in such precarious times.”
Communication was key and not everybody had a perfect relationship, says Rita Cool, a financial adviser with Alexander Forbes. “Money can be a big problem in a relationship – if your partner hides excessive purchases or has debt that you weren’t aware of, that’s a huge issue. It shouldn’t be a fight – talk about it as a couple.”
It takes two to plan for your future, Cool says, which is why she recommends finance date night, so couples can step out of their routine. “There’s so much going on otherwise, but you don’t think about debt, what if someone loses their job, or if you die? People have strange ideas but it needs to work for your relationship and family.”
If your relationship is new, Cool warns never to jump into combined finances too early on because trust doesn’t work with money, but if you envisage a long-term future – even if it does not entail the traditional white picket fence and Tupperware collection – sort out your finances.
“Many people seem to think they were in a ‘common-law marriage’ because they lived together for a long time, so they will have protection. But there is no such thing in South Africa. You might have been in a very loving relationship with a partner for decades and then they die – so you must get a relationship agreement in writing.”