It’s Valentine’s Day tomorrow and whether you’re big on hearts and flowers or the whole forced national ‘love in’ makes you more nauseous than amorous, it does throw an interesting spotlight on our relationship with money.
According to one of the many “love and money” surveys that tend to make their way into my mailbox this time every year, too many of us are in dysfunctional relationships - financially speaking, at least.
At face value it would seem that one in five Brits are in a financially incompatible relationship. According to one survey of couples – among them those living together, living separately and married couples – almost a fifth say they wish they had talked about their finances earlier in their relationship.
There’s a worrying trend among the younger generation not to talk about money at all in a relationship. But judging from the response of more than a third of divorcees, who said persistent financial worries were one of the reasons they broke up, these young couples would be wise to start sharing their financial peccadillos sooner rather than later.
Admittedly, credit card balances, loans and spending habits may not be the most romantic of topics, but trust me, “accidentally” finding out the love of your life has a nasty financial secret is a real passion killer too.
Maybe the best place to start is your own relationship with money. Are you naturally more of a spender than a saver? Do you have an eye on the future or are you all about the here and now? Do you think of yourself as a risk taker or someone who’s risk-averse?
Whether you’re married, divorced, separated or single, your own relationship with money is an important one to take care of.
The fact is that none of us knows exactly what is around the corner, so it’s essential that you make sure that your savings and investments are in line with your own personal goals. Knowing you have savings and investments in place and your money working as hard as possible, will give you peace of mind.
Take it step by step
Start by reviewing your pension plan(s) one week, then take a look at your ISA the next. By setting up a regular monthly saving into your ISA you can make investing automatic as well as enabling you to take advantage of the market conditions, whether they’re up or down. It also takes one task off your ‘to do’ list if you know that you’ve got your ISA investments under control. Just regularly review what you’re investing in to make sure you stay on track. Our Select 50 list of favoured funds makes building a diversified portfolio easy.
When you’re planning ahead, it also pays to consider the unexpected as well as the retirement you hope for. As well as writing a will so your loved ones are looked after when you’re gone, you also need to think about your own care in later life.
According to numerous reports, too few people are factoring in the cost of care when figuring out how to make their pension pot stretch to fit their needs. While none of us wants to think of a time when we could become too ill to care for ourselves, as we age the odds of that happening increase.
I told you, it’s not romantic but it is essential. Develop your own strong relationship with your finances and you’re far more likely to get the “happy ever after” you want, with or without Miss or Mr Right - and certainly without them messing it up for you.
The value of investments and the income from them can go down as well as up, so you may not get back what you invest. Select 50 is not a personal recommendation to buy or sell a fund. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. Fidelity Personal Investing does not give personal recommendations. If you are unsure about the suitability of an investment, you should speak to an authorised financial adviser.