Even if you’re sublimely happy with your other half, statistics show that around 31% of couples clash over finances on a monthly basis.
You might be thrifty as hell - you may live within your means, make sensible choices, and do everything right in order to keep your bank balance in the black.
However, if you’re sharing your home, and finances, with a partner who wastes money and refuses to reign in their spending (or worse, labours under the assumption that they are actually spending wisely) then life can be really difficult.
Obviously this is the clear place to start. After all, among couples that are “in sync” about their finances, 68% report that their financial communication with their partner is either “very good” or “perfect”. If your partner has a clear and persistent spending problem that is causing problems for the joint household, then you are well within your rights to gently sit them down and talk to them about it.
A good way to approach this is to sit down with receipts or your previous bank balance that details all the transactions that have taken place over that last few months, and to go through them together.
The key to this task is approaching it as a team and taking joint responsibility for every outgoing, not using it as an opportunity to point the finger and accuse (even if it may be tempting). Use the occasion as an opportunity to realign your thinking and raise joint awareness of the current state of your finances.
In order to keep the occasion as non-confrontational as possible (which can sometimes be difficult when it comes to discussing money), try asking your partner a few of these questions so you can gain a better understanding of their way of thinking:
- How do you feel about our finances right now?
- Ideally, how much would you like to be saving every month?
- What stresses you out, financially speaking?
- What is your saving priority?
2. Approaching them in the moment
If they won't sit down and talk then instead why not try the 'gentle nudge' approach? Every time you’re together and your partner is going to make a useless spend, just give them a gentle nudge.
Say something neutral such as ‘I can't remember if we already have… xyz’ or 'I can't think when I will really need to use this...'. You can even ask them directly if they feel it is a necessary spend. Asking them to stop and think in the moment, to take a pause before each transaction, can make them more mindful of what they are doing. Suggest that you both learn to ask yourselves these 5-second finances questions each time you are about to spend a significant amount of money.
3. Attend financial therapy
Financial therapy is real. You can either; buy a book and work through it together, or literally both go and see a certified financial therapist. Hearing things from a third party expert can sometimes make the difference to someone. They can see their behaviour more clearly from a different perspective, and may be less defensive if it is coming from an expert who is outside of the relationship.
Furthermore, with a therapist you can actually build up solid positive financial habits with which to replace the bad ones you are trying to shed. It is a way of both tackling the problem together and relearning how to be financially literate in a way you both understand.
4. Work toward a compromise
Maybe your partner is spending money because there’s something they really, really, want. Maybe it’s a super special five star holiday they’ve been dreaming about since childhood, or maybe they want to impress their boss with expensive work lunches. Maybe their spending is even rooted in something else entirely; fear that they are not providing enough for their family, or worry that the money will go and they’ll have nothing to show for it. There are many reasons why people spend money. You just need to figure out your partner’s.
Sit down together and find out what it is they want (in a return to point number 1), and communicate. If it’s a new car or super special holiday maybe it’s a cost you can compromise on. Open a new joint savings account and save towards that together every month, with the understanding that you’ll spend less on other things. With this joint goal you will not only be working towards the same thing, but it will also open a channel of communication when it comes to challenging or questioning unnecessary spends they make on other things.
5. Set clear parameters
Making it clear exactly what each person needs to be responsible for financially can make things a lot clearer and easier to manage on a daily level.
Sit down together and make a list of all the financial responsibilities you share. (ie. rent or mortgage payments, bills, car payments, food, etc.) Make sure the list is totally exhaustive, and then look at your respective salaries and divide up the payments. If your partner knows that they have to make certain standing payments each month they may be more likely to control their spending.
Ensure that you list ‘saving’ as a compulsory outgoing. Aim to ‘reprogram’ the way they view saving – moving it from optional to obligatory. By setting up an automated saving step in your app, your bank will automatically send your money to your digital savings wallet. Once you have a handle on your savings and have built up a solid safety net fund, you can being investing your money for the future.
Money is stressful, and talking about money can be even more so, but nothing ever got fixed that wasn’t acknowledged first.
Your capital is at risk, and past performance may not be a reliable indicator of future results. Oval Money is not permitted to provide financial advice, and if you have any questions please consult an expert.