Is Your Relationship With Money Affecting Your Family Life?
Joseph is a young professional. He graduated from university several years ago and got a good job in the technology industry. 3 years ago he got married and had a child.
Joseph is a spender. Being in the IT industry doing sales, he felt that he always needed the latest gadgets to show that he was up-to-date. He’s always the first one among his friends to get the new iPhone. He’s the go-to guy for his friends and clients, on his “expert” opinions and reviews as well as how to use the new features in each phone. He changes his laptop every 2-3 years too just because new laptops have new features.
Joseph is also a car lover. If he passes a magazine stand, he will be browsing the Motoring section and drooling over the Maseratis and Lamborghinis. Although his salary cannot afford those yet, he loves a new, value-for-money Korean or Japanese car. The bigger, the sportier, the better. Every year when he gets his bonus payout, he will think of a way to trade in his “old car” and upgrade to a slightly better car. It is always tempting because the car traders usually promise to deliver right before Chinese New Year. That way, the relatives of Joseph will see his new car (again) and know that he’s doing really well.
Joseph’s son is 2 year old, often decked in cute little branded clothes, especially when Joseph brings him out to meet his friends and relatives.
Joseph’s wife is working in a local bank, in an administrative role.
Joseph is in debt. In the last years, with getting married and moving into their HDB, they had taken on a couple of loans - a personal loan to throw the lavish wedding, as well as a renovation loan because he wanted their HDB home to have a “hotel feel” to it.
Initially, Joseph’s wife was on board with him. They were young with big dreams. She wanted to be supportive as her husband chased his dreams of becoming rich and successful. His image is important, especially since Joseph is in sales.
Soon, debts started to build up and they realised they could hardly keep up with the minimum payment each month. He’s pushing the wife to try to get another “staff loan" from her employer because the interest rates are much lower than other banks.
She is reluctant because she had already taken one loan for Joseph previously and she’s uncomfortable because he never gave her any money to repay the loan or interest. She is very risk averse and doesn’t like debts so she saved hard to pay off that staff loan and she had just managed to clear it recently.
Many evenings, Joseph will talk to his wife, excitedly sharing about a good deal he found online, like that Dyson fan or the latest Xiaomi gadget. Sometimes, he’ll brood over the loan payments and pester his wife to try to borrow more money from her relatives to help with this month’s credit card payment.
Joseph’s wife is stressed. She cries to herself often at night. She’s afraid of the mounting debts. She’s afraid of having to ask her family, relatives or friends for money for her husband’s debts. They will not believe it because in their eyes, Joseph is so successful in his job.
She wonders what she had gotten herself into with this marriage. She never knew about her husband’s habit of taking debts and borrowing money before they got married. She just wants to live a simple life. She doesn’t need this high life with the latest gadgets. Maybe she should just take her son and run away, away from Joseph, away from the mounting debts, away from everything and live a simple life. Just maybe…
If your marriage is experiencing problems and stress around money, you are not alone. Overspending, credit card bills, debts, gambling etc. Money-related conflicts are one of the most frequently cited reasons for divorce.
Financial stress can affect both couples in debts as well as wealthy couples. This is because couples can have very different money values and experiences growing up. Money-related conflicts can be avoided through communication and understanding each person’s point of view.
Money conversations are best started before marriage, but it is never too late to start understanding your partner’s perspective of money.
Start a money conversation with your partner with these 5 questions:
What are your money values and beliefs?
“Money is meant to be spent.”
“Money is hard-earned.”
“Money does not grow on trees.”
You may be surprised that you and your partner have very opposing thoughts about money and spending. Understanding his/her money beliefs and how one’s childhood experience was like will deepen your understanding of each other - in the financial sense.
2. What are our financial priorities?
As a couple, talk about your financial goals and priorities for the future.
Is it to buy a dream home?
Is it to travel the world?
Is it to save up and start a family?
When couples do not talk about their priorities, they may be moving in different directions and facing stress if one party is spending in an area that the other person is not keen on.
3. How will we manage our household finances?
Talk about how you will share the day-to-day expenses and split the cost between the two of you.
Will you have a joint account for this purpose?
Or will you split the bills and have one party take care of groceries and school expenses for example, and the partner will take care of mortgage and utilities and so on.
Talk about it and come up with a system which feels fair and equitable for both parties.
Combining your finances fully is a big commitment between couples. This system works for stable relationships as well as for couples who are like-minded when it comes to money matters. If you are unsure, do not rush into it.
If you are in a new relationship, give yourselves some time to run a joint account together for household expenses first. When both of you are fully comfortable with each other’s money mindset and have financial goals which are aligned, then go ahead and combine your expenses.
4. How much shall we save?
Start with the end in mind. Instead of budgeting how much you want to spend, talk about how much you wish to save, to get to the priorities that you have discussed in question 2 above.
The golden rule is definitely to spend less than what you earn.
Beware of the lifestyle inflation trap where you start to spend more than you earn as your income grows.
At the start of each year, set a saving goal in terms of dollar value or percentage of income as a couple and work towards this together.
5. Is there something that we need to learn about money?
Very often, money conflicts could be avoided if you are savvy with your finances. Money is something that all of us deal with each day, whether we like it or not. Money is a topic which should be taught in school.
However, given all the resources on the internet these days, you can easily learn more about how to manage your money well.
Identify your weak spots in your finances.
Are you overspending? Learn how to budget and track your expenses.
Are you oversaving and keeping all your cash in the bank? Learn about how you can put your money in safe assets which give you a higher return.
Are you interested in starting to invest? Learn more about stocks and bonds, and how to start to invest confidently.
I hope this article is useful to you. Aligning your financial goals and learning to take care of your finances together will help you grow your relationship with your partner and set a foundation for a family unit that is confident around money.
For the month of February 2024, when you sign up for my “Get Clarity on your Finances” coaching, which includes 3 one-on-one online sessions with me, your partner can sit in and do the work together with you, at absolutely no cost! Let this February be the start of many money conversations between you and your partner, so that you can build trust and shared goals in your relationship.