Five money mistakes that couples should try to avoid

There’s plenty of common errors couples make when managing money. Here’s what you can do to build a stronger partnership – and bank balance.

Couples who can’t spot their own money mistakes risk seriously damaging their relationship.

Financial stresses are the second biggest cause of divorce, behind infidelity, says money coach Karen Eley.

“While a couple has a relationship with each other, they also have their own unique relationship with money,” she says.

Whether it’s day-to-day financial matters or long-term investing, understanding the money mistakes couples make – and how to avoid them – helps build a stronger partnership.

Watch out for these five errors.

1. AVOIDING MONEY TALK

“Transparency is key,” says Eley. “Set yourself a time frame for airing your financial confession’, or have regular monthly money check-ins so both parties know what’s going on.”

Eley recommends both partners have an active role – even if only small – in managing money.

2. TOO MANY RESTRICTIONS

Excessive rules about spending and restrictive household budgets are dangerous, especially if one partner doesn’t buy in, Eley says.

“Each partner should have some discretionary funds that they can have complete autonomy on how it’s spent,” she says.

Money coach Karen Eley says each partner should play some role in managing money.

3. RESENTMENT

“I see this often with couples,” Eley says.

Control, power dynamics and resentment can surface when one partner earns significantly more than the other, she says.

“Then conversely the other partner often has guilt, shame and avoidance – they don’t play well together.”

4. RISKS DON’T FIT

More couples are investing together, which unites them towards a common goal but only if there’s good communication.

Online investment service Stockspot had a 100 per cent rise in people opening joint investment accounts in 2020, particularly among younger couples, but chief executive Chris Brycki says mismatched tolerance to risk can be a problem.

“One person may not be comfortable with the inevitable ups and downs of a high-risk investment portfolio, but may end up saying yes to please their partner,” he says.

“This could result in arguments as the share market moves up and down.”

5. LETTING EMOTION TAKE OVER

Brycki says even experienced investors can get emotional. “If you have a third party managing your investments, the hands-off element will allow you to be less involved in market ups and downs,” he says.

Emotions are often intense early in relationships, so for some it may be premature to start investing together quickly.

“If you don’t have an agreement in place, then you might be facing a bit of messiness to split your investments if your relationship goes south,” Brycki says.

Rebecca and Graham Matthews, pictured with dog Willow, now have more money conversations. Picture: Brad Fleet

Childhood sweethearts Rebecca and Graham Matthews have been a couple for more than 23 years, and also work together running their life coaching, nutrition and personal training business The Mind & Body Co.

Matthews says she and her husband recently completed a program to discover their money personalities after finding their approaches to money differed.

“We had assumed we were still aligned and what we were working for was still the same, but we had individually evolved,” she says.

“When you have been together for so long you assume you know what the other person is thinking.”

Now the couple no longer assumes. They discuss.

“We have got back to talking at a more granular level – spending more time having those conversations,” Matthews says.

Their new joint philosophy is “save first and set up for long-term financial success as soon as we can”.

@keanemoney

BE FINANCIALLY INTIMATE

• Discover what money means to you with some self-reflection. How important is it?

• Explore your partner’s money story, including family traits and childhood experiences.

• Be an attentive listener, rather than thinking about your next response.

• Set joint financial goals.

• Appoint roles, dividing up money management areas such as bills, debt repayment and financial strategies.

• Get help if you can’t talk it through.

Source: Karen Eley, founder and CEO of womentalkingfinance.com.au