Important information: The value of investments can go down as well as up, so you may get back less than you invest.
Valentine’s Day has been and gone for this year. Whether you respond to that with an “Awwwww, shame” or a sigh of relief, the figures show that there is still plenty of work for us all to do when it comes to our relationship….with money.
It doesn’t matter if you’re coupled-up or single, bearing in mind the fact that a quarter of married couples say they frequently argue about money and just over half of single people say financial security has to be at the root of their happiness, it’s safe to say we could probably all do to show our finances a little more attention.
1. Why couples might want to take a leaf out of the singles playbook
When you only have yourself to rely on financially, it’s no surprise that if you’re single you feel a pressing need to have a financial safety net around you before you can really say you feel secure. The stark reality is that when you’re single you have to be able to face whatever life throws at you financially, alone. So establishing that security has to be a number one priority.
But this self-awareness also potentially stands singles in better stead than their coupled-up counterparts too. Loved-up couples who leave all the financial responsibility to their ‘other half’ might want to take a leaf out of these savvy singles’ book and make sure they’re just as financially switched on. Because maintaining some sort of financial independence is very wise, whether you’re single, or not.
2. Why trust is key when you’re coupled-up
When you’re in a couple it’s only right that you discuss your future financial hopes and goals and set in place realistic plans to achieve them. Knowing not only exactly what state your finances are in, but also those of your partner too, places you in a very strong position for a bright financial - and marital - future ahead.
Trust is a huge part of any relationship, especially one in which your lives are intertwined in so many ways, as they are in a romantic relationship. That is why being cagey, secretive or going as far as to lie about what you earn or how much you owe does not bode well for your future together. Pretend you earn more than you do and the shortfall is soon going to become apparent. Conversely, lie about what you really earn and you sow the seeds for a relationship that’s lacking in trust from the word go.
To get that bright future you dream of - together - be open now with one another so you can forge ahead and be stronger together.
3. What happens when opposites attract?
Statistics show that a quarter (24%) of married couples frequently argue about money, with 22% also saying they are extremely or very stressed about their financial situation.
Whether you are painstakingly careful with money or more prone to spending like there’s no tomorrow, being honest with your intended about your own relationship with money is one of the primary building blocks of a strong marriage.
Some people are spenders and some are savers, some fall into the middle ground and some are prone to veer erratically from one to the other. Whatever your own personal disposition, make sure you share it with your intended.
Don’t panic if you find you have completely different attitudes to money. It doesn’t have to sound the death knell for your long-term future. On the contrary it can actually be beneficial and bring some financial balance to your relationship, if you work together. But, in order to be able to work together you have to understand each other’s attitude to money.
For instance, if one of you is a saver and the other a spender you could keep separate bank accounts as well as having one joint account that you use for all shared expenses - like rent/mortgage, food, bills and so on. It’s a good way to prevent your money differences from driving you apart.
You can also use differences to your mutual benefit - sharing saving habits and smart spending tactics - to get the best of both worlds.
4. Tips for those in it for the long haul ….
If the past year has taught us anything, it’s that the worst can - and does - happen. Whether you are single, married or co-habiting, having some savings up your sleeve is essential, so you’re as prepared as you can be, for whatever life throws at you.
By keeping your regular savings and investment plans going, you make sure you keep your future plans on track. Losing out on six months, or a year or two, could have a detrimental impact on your longer-term financial security. And as we have seen time and again, we need every penny we can save to ensure our future financial wealth is in good shape.
Staying invested through tricky times is easier if you do it slowly and steadily, but surely. By setting up a set regular savings plan, investing becomes automatic and stress-free and comes with the added benefit of spreading any risk.
The key is to remain focused on your longer-term plans and try not to let the current pandemic disrupt your future financial goals.
5. … and tips for those who won’t be …unless they mend their ways
An astonishing number of people haven’t told their partner the full extent of their debts, and according to relationship charity Relate, some 14% of those in debt say they have kept it secret from a partner. Well, that’s one way to risk bringing the ‘honeymoon period’ in any relationship to a screeching halt!
If you’re one of these people with a secret, it’s time to come clean. Suddenly finding out your partner or spouse has thousands of pounds worth of debt can put a strain on any relationship. What’s more, if your other half is added to an account on which you have been ‘delinquent’, their credit score will be adversely affected.
Similarly, if you’re added to their account on which they have debts, you’ll become jointly liable for paying off those debts. And if they then go on to default, the creditor can choose to come after you for the entire debt, even the amount that was borrowed before you were on the account.
That’s tough, but it’s also why it’s really worth getting to know who you’re getting into bed with, financially-speaking as much as anything else.
Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.