(03) 9020 2905He’s got looks, money, crowd-pulling power, guaranteed succession to the top job, grace, a cool British accent, a special passport and I’m betting his cars don’t get parking tickets.
I haven’t got much over Prince William. But being DebtMan and not Wills has some advantages. (Some of the following may seem jealous or plain petty.)
I have more hair. I don’t have to play polo. I’ve got a less dysfunctional extended family. I can go to the toilet by myself (at least when I’m at work). I have a real job. I understand the joy/pain of having a mortgage. I didn’t have to invite Julia Gillard to my wedding.
And I am already the king of my family (according to my Princess, bless you DebtGirl). “Long live the King!”
I have also been married for eight years. And just the once. That qualification (which ranks slightly more impressively than his father), added to being a financial adviser, means I’m licensed to give Wombat – rumoured to be the nickname Will’s parents had for him – a few pointers on money and marriage.
About 50 per cent of marriages don’t last. Around 35 per cent of those fail because of money issues. So this – Wills and Kate and any other newlyweds out there – is important.
Cash savings
Mine, yours and ours … there’s no right answer. Some have separate accounts for everything. Others have separate accounts and one joint account.
But let’s face it, marriage is about teamwork. Having separate spending money might be important, but ultimately, if you’ve got separate bills, spending money and incomes, you may as well have separate lives.
This is particularly so if you’ve got a mortgage and an offset account. Offset accounts are designed to speed home ownership and work best when all money goes into the same pot. I’ve seen people throw away up to $10,000 a year by insisting on “my money and your money” and not properly using offset accounts. That’s okay, but understand you’re paying a big long-term price for your “financial freedom”.
No surprises
I don’t care how good a bargain it was, you can’t hide some new crown jewels or a new stable of polo ponies on a credit card. Major purchases need approval from husband and wife.
Even with separate accounts, if you’re growing old together, money is an asset of the couple. And that’s how the courts see it.
Talk about it
You start relationships thinking about growing old together. But there’s rarely a mention of finances there when the sex is hot.
Put the kids to bed. Take a hot shower. Together. Grab a bottle of wine. (Make that two.) Talk about where you want to be in 30, 20 or 10 years. Mortgage-free? Beach house? Private school for the kids? Regular overseas holidays? Now work backwards. How are you going to get there? You’ll be surprised at how little you probably have to give up.
Pay yourselves first
George S Clason wrote in the investment classic “The Richest Man in Babylon”, the “pay yourself first” principle. That is, put away 10 per cent of your salaries to achieve financial freedom. After putting away that 10 per cent, THEN you pay the bills. What’s then left over is spending money.
The financially dumb do it the other way around. They put spending money first, pay bills second and then … there’s no money left to invest.
Tax advantages
It’s rare that both parties earn similar amounts of money, which is both a positive and a negative in a relationship. Australia’s tax system allows that to be exploited by putting income-earning investments in the name of the lower-income earner and negatively geared investments in the name of the higher-income earner. This is hard to do with “separate” finances.
Okay, back to Wills and Kate.
We do need to take into account that his granny, Queen Elizabeth II, is worth around half a billion dollars. And that mountain of money is headed his way. Eventually. Charles and Camilla will get a crack at it first.
But do you know what? Money doesn’t solve problems. It just creates new ones. The money issues the soon-to-be royal couple will face are going to be the same ones you and I face. Just with a couple of extra zeroes on the end.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au .