She's On The Money - Setting Up Healthy Money Behaviors in Your Relationship

Episode Date: July 26, 2024

Navigating financial matters is a significant aspect of any relationship, and establishing healthy money behaviour is crucial for long-term harmony and financial stability. Whether you are newlyweds, long-term partners, or planning to merge your finances, addressing money matters with transparency, mutual respect, and strategy are vital in any sustainable relationship. So today we give you tips on how to establish healthy money behaviour in your relationship. For immediate crisis support relating to domestic violence or sexual abuse, you can contact 1800RESPECT online or at 1800 737 732. In an emergency or if you’re not feeling safe, always call 000.  Good ShepherdCommBank Next Chapter Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. hello and welcome to she's on the money and another little bonus episode with just me Victoria Devine. After our wonderful chat a few weeks ago with our friend Caroline Wall about identifying the signs of financial abuse, I wanted to jump on and do a quick little solo episode about how to set up healthy money behavior in your relationship when sharing finances because it is hot topic at the moment. I feel like I'm seeing so many videos on TikTok about how to share finances and what the right thing to do is and what the wrong thing to do is because navigating financial matters is a really significant aspect of literally any relationship and establishing

healthy money behaviors is crucial for long-term harmony and financial stability. Now, whether you're a newlywed or you're long-term partners, or you're planning to merge your finances, or maybe you need to have some money chats with your housemate, addressing money matters with transparency, mutual respect, and a little bit of strategy are vital in any sustainable relationship. so because you guys know I love to have a little rant which is probably why I've jumped on on a solo episode couldn't wait for a co-host to be free I've broken this up into six little segments to have a quick chat about now money and relationships are incredibly fickle but the first thing that you're probably going to expect me to talk about is communication and that is my

number one point so open communication so first things first we want to start initiating conversations about money early. Open and honest communication about finances should start as early as possible in a relationship. Now, I don't mean go to your first Tinder date and ask them what they earn, what they own, what they owe, and what they're spending. That's probably a little bit invasive. But as the relationship starts to flourish, discussing financial backgrounds, including how you were raised with money, your spending habits, and existing debts or assets is really important because understanding each other's financial perspectives is going to help in building a foundation of trust. The next thing I want to talk about is regular financial check-ins.

This isn't sexy, but we can make it sexy. And I've said time and time again on the podcast, having a regular financial check-in to me is incredibly important because you're going into it in the same mind frame. No one likes being taken out the second they get home from work with, oh my gosh, babe, I have been looking at the budget. Like they need to be mentally prepared for that conversation. So scheduling regular finance meetings to discuss your current financial situation, upcoming expenses, maybe check in on your savings goals and any other changes to your financial plan is going to set you up for consistent success. These check-ins make sure that both of you are staying informed and engaged in the financial decision-making process.

the third thing I wanted to talk about when it comes to communication and I promise I'll get off communication really soon because that is definitely a topic that when we talk about finances I'm always saying communicate communicate communicate because how many people say oh yep the relationship failed because of communication the last thing I want to talk about is being transparent so we need to be transparent because at the end of the day there shouldn't be any shame around money so if we are going to be transparent we need to be transparent about what we're earning what we're spending, what we own and what we owe. And I mean, you don't have to come right out the gates in a brand new relationship about all of these things, but hiding financial

information can lead to distrust and resentment. So sharing your financial statements, your credit reports and any other relevant documentation is going to mean that you're both on the same page and have a clear understanding of the financial landscape. But also you only need to do this when you are ready. Like communication is key, but we're not just diving in and going, hey babe, do you want to see my credit check? Like that's not something that is expected. And we need to also navigate these waters with what you're comfortable with, knowing that if you're uncomfortable with anything, maybe that's a good sign to check in with your own money story around maybe why you're feeling uncomfortable. Is it uncomfortable because it might be just too soon

in the relationship? Fair. Or are you really avoiding talking about debt because it's stung in the past. All right, moving on, I want to talk next about establishing joint goals. So setting short and long-term goals. How many times have I talked about this on the podcast? I would be a millionaire if you gave me a dollar for every time I'm like goal setting, goal setting, goal setting. But what we want to do is discuss and then agree on your financial goals as a couple. These can include saving for a vacation. You could be buying a home, starting a family, or even planning for retirement. Setting really clear goals is going to help in aligning your financial priorities and working together towards common objectives. This is going to make you feel closer as a couple

as well. So finance isn't that sexy, but there's something very sexy about being on the exact same page as your partner. The next, you're not going to like this because it feels monotonous, but we're going to be creating a budget. Developing a joint budget that covers all household expenses, your savings, and any discretionary spending is key here. A really well-structured budget is going to have absolutely everything included in it. Every single dollar that goes out of your bank account needs to be included. I've said time and time again that most of us can articulate very clearly what comes into our bank account, but we can't articulate exactly what leaves. What we want to do here is a deep dive into what we are actually spending, not an idealistic what

we're spending because in a perfect world, I'd only spend $150 a week on groceries, but I know that is not going to be true. So sitting down and crafting a little bit of an idealistic budget is actually going to put you behind. So what we want to do is be really honest with ourselves around what our actual spending looks like. If you're spending $7 a day on lattes, that's okay, but we just need to be aware of it. A well-structured budget is going to help maintain your day-to-day expenses and make sure that both of you in this relationship are on the same page about financial commitments. There is not anything worse than thinking, all right, we've sat down, we've done our budget. We're only going to spend $150 on groceries and X on this and Y on that. And by the

end of the month, we would have saved $750. You get to the end of the month and the money's just not in the account. That leads to animosity. That leads to blame. That leads to you having conversations that are not that nice, that could be completely avoided if we were just honest about what actually goes in and out of our bank account each and every single month. The next thing that I'm, look, let's be honest, I need it to be one of your goals. This is an emergency fund. And I think absolutely everybody in the entire universe should have an emergency fund, whether they are in debt or not. Lots of finance experts will say, smash down your debt. But I think there is something really motivating about having an emergency fund while you're in debt, because it

means when an unexpected cost comes up, we are not repeating the same process. We are breaking the cycle. We are able to pay for that additional expense out of the money that you have saved from your emergency savings, and you're not continuing to perpetuate a cycle that isn't working for you. So establishing an emergency fund to cover unexpected expenses like your medical emergencies or car repairs, or even a job loss is important. I'd be aiming to save between three and six months worth of your living expenses. Key there is living expenses. We're not talking, you know, everything that you're spending. When we are talking about an emergency fund, it doesn't take into consideration how much you're investing, how much you're saving, you know,

any of your financial goals. It's just, what is it going to cost to put a roof over your head, keep your bills paid and put food on the table? An emergency fund is going to provide you with the financial security that you deserve, and it's going to reduce your stress. Even if you're in mountains of debt, knowing that there's an extra couple of hundred dollars to the side, I promise, is going to help you sleep better at night. Now, I'm really sorry for the ranty nature of this. I hope you're on board with it though, because I feel like we're getting stuff done. The next thing we're going to do is define roles and responsibilities. We're going to treat this like a job. So the first thing when it comes to roles and responsibilities that we're going to do

is determine contribution proportions, which is, again, something a little bit spicy. You might not agree with this. I actually don't care. I believe in equity and equality working together. So what you're going to do is decide on how you're going to be contributing to shared expenses. This can obviously be done equally, split down the middle. You both pay 50-50. It could be proportional based on your income. Say you are the main breadwinner in your relationship and your partner earns half of what you do. From my perspective, it's not necessarily fair that your bills are 50-50. For me, I would say that you maybe need to be paying a little bit more because by going 50-50, you're putting unnecessary financial stress on your partner. And at the end of the day,

are we not working towards shared financial goals and a shared outcome? Any other method that's going to work for you is going to work, but we need to have this conversation. The key is to make sure that both of you feel that the arrangement is not just fair, but it's equitable. The next thing we're going to do is assign some financial roles. So we're going to assign specific financial roles to each of you. So one of you is going to be in charge of paying the bills. One of you is going to be in charge of managing investments or tracking expenses. Having really clear division of your roles is going to help in efficient financial management, and it's going to stop tasks from being overlooked. What I do because I'm really good at overlooking things

is I actually just put calendar notifications into my diary so I know that come November there is going to be a notification that pops up that says review car insurance and I know that that's not exciting and you could just press dismiss but I always make an effort to review my insurance details because I did that last year and saved a couple of hundred dollars and that's a couple of hundred dollars that can now go to a goal instead of just going down the drain. Now, the next thing that I want you to organize is joint and individual bank accounts. Now, obviously, finance is really fickle and it is actually really personal. I have worked when I was a financial advisor with clients who had completely separate bank accounts and they were retired. They had done their entire lives

this way and it worked for them. I've also worked with people who've never had personal accounts because they've been together since they were 14 years old and they've always had shared finances. When it comes to your accounts, there is no right and there is no wrong. But a joint account could be really useful for things like shared expenses, while individual accounts are something that I would push you to have irrespective of whether you completely share your accounts or not. I want you to always have personal financial freedom. This approach is going to allow for autonomy while ensuring that shared financial responsibilities are met. Also, there is a very big piece here about having access to funds to leave any situation. When we talk about emergency

funds, I also want to make sure that you have your own emergency fund. If you're in a situation that you don't want to be in, you can get yourself out of it. To me, that is the ultimate financial freedom. Now, let's go to a quick break. On the flip side, we're going to dive a little bit deeper into exactly how you can set yourself up for healthy money behaviors in your relationship and what to do when it comes to sharing finances. Don't go anywhere. All right, guys, we are back and we are talking about how to set up healthy money behaviors in your relationship when you are sharing finances. I wanted to start this side of the episode off on, I guess, a little bit more of a spicy topic, and that's about building trust and accountability,

which a lot of people just assume is given in a relationship. Building trust and accountability is so important in a relationship, especially when it comes to finances. So the first thing we're going to do is making sure that we are respecting each other's financial preferences. And this might feel like a no-brainer. You might go, well, of course I do, V. But the reality is sometimes we forget to sit down and actually ask our partner how they feel about specific goals. I want to know is this also your goal or are you working towards this because you know this is what I really want making sure that if we are going down the route of investing does my partner feel overwhelmed do they feel excited are they on the same page are we you know having these conversations

and respecting each other's preferences because it is so important to make sure that we're not only respecting their preferences, but also avoid being critical of their spending and money habits. But we also need to make sure that we are avoiding being critical of our partner's spending habits, which can often happen without us even realizing it. Instead, what we want to do is work together to find a balance that kind of accommodates both of our needs and both of our desires. Next, should not come as a surprise, but it needs to be said, we need to avoid finance secrets. financial infidelity such as hiding purchases or secret bank accounts can actually damage trust in a relationship and that stuff can last a long time so commit to being honest about all financial

matters no matter how small even if it's just like maybe telling your partner that it was on sale when maybe it wasn't this is where it needs to be stamped out okay the next thing we're going to do is always support each other's financial goals. So what we want to do is encourage and support each other's individual financial goals, whether it's you paying off your HECS early or you want to start a business or you want to invest in some further education. Showing your support for your partner's aspirations fosters a really healthy financial relationship. And it shouldn't have to be said, but often we forget to ask our partner, what do they want to achieve? Where are they going, especially when we're only focusing on things that are joint or only focusing on

ourselves? Now, moving forward, this is where things get really serious. And we're going to talk about estate planning and future planning, but that is planning for the future. So let's start with estate planning. I want you to discuss and plan for the future by creating updated wills. I want you to set up powers of attorney, and I want you to establish beneficiaries for insurance policies and retirement accounts. It's not sexy, I know, but life is fragile and these things are going to put you in the best possible position should the worst happen. Estate planning makes sure that your wishes and your partner's wishes are honoured and it also provides a lot of peace of mind. The next, retirement planning. It's not sexy, so let's call it working towards financial

freedom for the day that we don't have to work. So what we want to do is work together to plan for retirement. Have you actually ever sat down with your partner and said, when do you want to retire? Because I know that before becoming a financial advisor in previous relationships, there's no way at the age that I was at, I would have had that conversation. And I can almost guarantee that when you sit down with your partner, if it's the first conversation you're having, you're going to have very different ideas of what retirement looks like. Not everybody goes, oh yeah, I'll get to 65 and I will retire. Often people go, oh, retirement. Oh yeah, like I would love to retire early. I'd love to retire in my 50s. That requires a lot of planning

and needs to become part of your goal setting conversation. Are we contributing enough to our superannuation? Are we actually taking that seriously? Does your employer have any advantages? Are there any benefits like the government scheme of matching your super contributions? do you know about that what does that look like how do we put ourselves in the best possible situation to reach a point in time where we can become completely financially free and don't have to go to work every single day to earn an income how do we do that we do that through financial education obviously you're listening to this podcast so like gold star for you my love but continually educating yourself about personal finance is incredibly important it's not something

where you can listen to a podcast one time, set up your super in a way that works for you, and then never look at it again. We need to be consistently learning and looking at it and reviewing. It might look like attending some finance workshops. It might be reading some books. It might be actually going and seeing a financial advisor. Making sure we are informed is going to help make better finance decisions. And it means that we can adapt changes right now in our financial situation to actually reach the life that we want and the life that we deserve. The next thing I want to talk about is conflict resolution, because at the end of the day, we're actually talking about a relationship here. We're not talking about, you know,

sitting down and just financially educating yourself. We're talking about doing finance with a partner. And ultimately, there are going to be times where you go head to head. There are going to be times where you're not on the same page. But what we want to do is make sure that we get back onto the same page as soon and as calmly as possible, right? So the first thing we're going to do is address conflicts calmly. I'm not the best at doing this. So this is more of a do as I say, not as I do kind of situation. I wish I was my partner. He often says, you know what? We just need a minute. Let's go wind down. And I'm just like, I'm ready to fight. I don't want to wind down. I want to discuss what's going on. But ultimately he's the smart one here. And

we actually need to diffuse the situation before we continue a conversation because it wasn't going to be productive, right? But financial disagreements are inevitable. They're going to happen, but how you handle them is what matters. Addressing conflicts really calmly and avoiding blame and criticism is really important. Trying not to say, oh my gosh, you always, or you do this, trying to say things like, oh, I really feel like this isn't working for us instead of you always mess it up means you're going to end up in a better situation and you'll be able to focus on finding solutions that work for both of you. The next, I don't adore this, but it's compromise. Every single relationship is going to have some level of compromise. Every successful relationship

that I know of involves some level of compromise. You need to be willing to compromise on your finance decisions as well. So understanding that both parties might actually have different priorities is really important because we need to find a middle ground because that's what's going to maintain harmony. You might really, really, really want to save for an overseas holiday, but your partner is saving for a different goal. Maybe we compromise and put the holiday off a little bit, achieve our partner's financial goal, and then throw absolutely everything we have into yours. Things go in ebbs and flows. And I think one of the best things I've ever learned about relationships is they are always going to involve some level of compromise from one party or another.

and if you're sitting there going, but I don't compromise on anything. I hate to break it to you. It's because your partner's compromising on more than you are. The next thing I want to say here is that if this is something you are struggling with, seek professional help. That's not me being dramatic and saying seek professional help. But at the end of the day, if you can't get on the same page and this relationship is really important to you, maybe consider having a chat to a financial advisor or more importantly, maybe a couples therapist will help you get on the same page. Professional guidance can provide you with an objective perspective and help in resolving complex financial issues. Don't ask your friends. Don't ask somebody who has a vested interest in

your relationship. Talk to somebody who's completely outside of it because while it might be really confronting and not what you want to hear, it's going to put you in a better a position. Let's move off conflict resolution because I'm sick of talking about it and it's not the most exciting topic to talk about. We're going to talk about actual tips for managing your money every single day inside a relationship. These are things that work really well for me and my husband. They might not work for you, but that's because everyone's finance situation is completely different. How I manage things might not be how you want to manage things, but the cool thing is we can learn about it and pick and choose the parts that might work for us to actually

test out. You don't have to do everything that I do. So the first thing that works really well for us is automating our savings and our bills. Lots of you might go, but V, I like being in charge of it. I love logging in and, you know, paying the bill manually. You do you. Doesn't work for me. Automating our savings contributions and bill payments means that we are consistent and we don't have any late payments. It means that our savings money gets taken out of our account before we have even the opportunity to have a look at it. We have, on the day that my pay goes in and my husband's pay go in an automatic transfer that goes into our savings. Automation is going to help in building a really disciplined savings habit when maybe you are a little bit spendy like me

and it also means that when it comes to bills you're reducing the risk of actually running into late fees which if you're like me if it's manual I'm definitely paying a late fee. The next is use some kind of budgeting app or spreadsheet to track your spending. Obviously I preach consistently reviewing your expenses to help identify areas where you can cut back and stay within budget. But tracking your spending means that we can just be completely on top of it. I think there's so much power in understanding not only what comes into your account, but how every dollar leaves. Because you worked hard for that money. I want to make sure that it is working as hard for you as you did for it. So let's just keep a little bit of an eye

on all of these little finance employees that we've got in our best year yet course that we did at the start of the year. And don't worry, we will release it next year. I talked about making every single dollar that you earn a tiny employee and they have to have a job. Like their job might be getting the groceries for you or their job might be actually sitting in a savings account. But like if they're sitting in a savings account and they're not earning you any money, are they working that hard? No, we need to performance manage them. How do we do that? What does that look like? So tracking your spending isn't necessarily about going, I know I spend $7 on coffee. It's going further than that and saying, is that $7 that I'm spending on that coffee

working for me? And if you ask me, absolutely, I would spend a lot more than $7 on a good coffee. And that is not me being privileged, but more a part of my everyday functioning. But you might go, absolutely not. That's not in line with my values. I'd prefer my little money employee to be over in my savings account, earning me more money. And that is where tracking your spending gets its power. The next is celebrating financial milestones. I was having a conversation the other day with a friend about not celebrating milestones and how when you look back, you go, wow, that was actually really significant. But in the moment, you kind of just go, eh, moving on, what's the next thing? But celebrate your financial achievements together. If you hit a savings

goal or you pay off debt or you're making a significant purchase, celebrate that. Like it doesn't mean going and buying a really expensive bottle of champagne. It could be taking the afternoon and going for a walk. It could be literally anything, but celebrating milestones is going to reinforce that positive behavior, strengthen your bond and mean that we're going to be better at it next time because we know how good it feels. And then the last thing I wanted to touch on was practicing financial independence. I know that we're talking about setting up healthy money behaviors in your relationship when you're sharing finances, but I think that every single person should be financially independent in their own right. So while having shared finances can be

really important, again, you don't necessarily have to do it if you're not comfortable with it, maintaining a level of financial independence is not just beneficial, it is essential. Make sure that you have access to your own savings and discretionary funds. I do not care if you work or not. Making sure that you have access to cash that your partner can't get access to, while it might feel a little bit morbid and you go, but V, my partner is my biggest advocate and my biggest fan and the best person in the entire universe, I can almost guarantee that someone in a situation that they wanted to get out of would have said the same.

so practicing financial independence is something that I am wildly wildly passionate about now I'll wrap it up here because I know that I ranted and I have raved and probably bitten your ear off but there is a lot that we need to go over and a lot to get on the same page when it comes to relationships and finance and this isn't the only episode that I think you should listen to we obviously have a lot but I was just feeling it in my bones that I wanted to jump on here and have a chat with you about some tips and tricks that you could implement today but we all know at the end of the day that establishing healthy money behaviors in a relationship when sharing finance actually requires open communication, mutual respect, and a little bit of strategic planning.

And by setting joint financial goals and really defining roles and responsibilities, we build trust and we can plan for the future. And then we are a stronger and more confident couple. Let's have regular check-ins. Let's be super transparent and let's come to the table with a willingness to compromise because that's what's actually going to be essential for maintaining a really healthy finance relationship. With all of these practices in place, couples, they're able to achieve financial stability and enjoy a really good future together. And at the end of the day, no one wants sticky money conversations. They're awkward, they're icky, and they don't have to be. Finance doesn't have to be something that is overwhelming. It can be

something that we are all excited about. So with that, I will see you guys next week. Thank you for joining me for a little bonus episode if you like them slide into our dms and let us know because i welcome any opportunity to get behind the mic all on my own and go rogue have the best weekend guys the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money

Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289. Thanks for watching!