(03) 9020 2905Mrs DebtMan claims I only agreed to wedlock because I would gain a second income with which to negative gear.
A scurrilous accusation. If true – and I confess to no such thing – then it would have been wretchedly short-term thinking on my behalf.
Sure, two incomes might have given me the ability to load up more frequently with geared property and shares.
And, um, okay … let’s say that perhaps it actually panned out a little bit that way. But I’ll cop to nothing more than unarguable economic persuasion on my part.
And, really, for how long would I get to do that? We loved our double-income-no-kid lifestyle. Travelled overseas when we could. Ate out at will. Hold back on big nights because we have to deal with muppets in the morning? Never!
Then came the bump, when our version of hedonism was done for. I got less than four years, if you account for the limitations on partying of pregnancy. How much damage could I do in that time?
Kids certainly change your life financially. While kids are pure gold – the best toys ever – they’re economically inefficient. There is no end to the amount of your time and money they will hoover. Lucky they’re cute and make you laugh and get otherwise all emotional, because as an investment, it’d be cheaper to be stung by a Nigerian letter scam. Twice.
The major changes, from a couple’s perspective, start happening at the shacking up, or knot-tying, stage.
Just having a “significant other” will impact on you financially. Some will see it as a zero-sum game – that is, where you win, your partner loses and vice versa.
It doesn’t need to be. If your finances are important to you, then you can absolutely shoot for making this joint venture an equation of 1 + 1 = 3.
I’ll skip the dating stage and head straight for that big pile of goo you land in the minute you start making financial commitments to each other.
That warm, sticky puddle is called “compromise”. And you better get used to swimming in it when it comes to your joint finances, as long as you’re agreeing to hang out together.
You’ll have to make some big financial decisions together, including whether to buy or rent, how many kids, what schools, where to holiday and whether to renovate or move.
And some not so big ones. It’s often the smallest ones that will cause the biggest fights. Here’s my guarantee: You will disagree/fight over spending. I’ve never seen a couple who share the same ideals for spending priorities.
That’s partly the “Mars versus Venus” thing. Men think women are crazy. Women think men are dumb. They’re probably both right.
Money values are as individual as fingerprints. It’s unlikely you’ll both earn the same. It’s near on infinitely unlikely that you’ll both share the same financial priorities – though hopefully you agree you’re headed in roughly the same direction.
There’s no simple recipe for compromise. But it does involve communication, which will beat passive aggression, the silent treatment and tantrums hands down.
Too few couples sit down to discuss their financial goals. And given that financial arguments rank top three of every list about bustups I’ve ever seen, that’s just plain dumb.
So do it, and earlier rather than later. If you both know roughly what sort of lifestyle you’d like to end up with, sit down and work out a roadmap, along with how you’re going to get there.
If you have no clue on the latter, sit down with a professional.
A financial adviser will, inevitably, also discuss your joint finances in terms of compromise. That’s because every dollar you spend now is a dollar that’s not compounding towards your future wealth. A balance needs to be struck. You want to spend up now, but you want to be fabulously rich later. They don’t have to be mutually exclusive, but compromise will inevitably need to be reached.
If you need help, working with a professional will also open your eyes to areas that you hadn’t necessarily considered, such as preparing for disasters (insurance), fine-tuning retirement plans early enough (super) and developing your wealth creation strategy (investments).
Someone will usually take charge of the household finances, but both of you need to make the big decisions together.
Bruce Brammall is the principal adviser with Castellan Financial Consulting (www.castellanfinancial.com.au). E: bruce@castellanfinancial.com.au.