A year in, the impact of COVID-19 is not only being felt by couples physically and emotionally, but it is also exposing incompatibility in personal finances.
There’s plenty of fuel available for a money fight. Living and working in close proximity becomes even harder if your spouse has lost a job or fallen ill. Dealing with a smaller household budget, plus home schooling, adds to the strain. Take away family back-up, as we try to keep elderly relatives safe, and you have all the triggers for a strained relationship.
Whether you are already in a marriage or considering a commitment, it’s more important than ever to discuss and understand each other’s views about money.
“Taking the time to understand how you each approach your finances, and how to navigate a better way forward, can pave the way for a happier relationship and home life,” says Shafeeka Anthony, Marketing Manager of personal finance website JustMoney.
Couples and cash
Just in time for Valentine’s Day, JustMoney has launched a video in which couples chat about how they manage their finances. This includes a focus on debt, a tricky topic that lends itself to raised voices and slamming doors. You can view the video here.
In the video, we see that in many relationships there is a spender and a saver. There is often one party who runs out of money first, and who doesn’t stick to the budget.
“It’s important to remember that, no matter how much you have in common, your partner’s attitude to managing money may differ greatly from your own. This is shaped from a young age and is difficult to change. No one approach is necessarily right,” says Anthony.
The way that people manage their money is highly personal. Big spenders enjoy brand names and the latest gadgets, and are likely to take greater risks when investing. Savers, on the other hand, read through newspaper inserts for bargains, turn off the lights when leaving a room, and are risk-averse when it comes to investing. Shoppers get emotional satisfaction from spending up a storm, and can easily go overboard on credit.
When financial opposites attract, this can lead to fireworks. Arguments about money can quickly become intense. It’s easy to feel criticised, even if your partner’s comments are well meant.
Counting on credit
Couples considering borrowing would do well by consulting their credit scores for a start. This is a tool that lenders use to decide whether an individual is a low or high-risk borrower. When you apply for a loan or credit, the bank or lender first checks your score and accompanying report. Your credit score not only determines whether you will receive the loan or credit, but also the interest rate you will be charged.
“Knowing your credit score is extremely helpful if, for example, you are a young couple and want to find out whether your dream of buying a home can become a reality,” says Anthony.
JustMoney has made the process easier with the launch of its new platform, CreditSav. This facility provides a free, up-to-the-minute credit score and report, along with content-rich articles, financial tools, and calculators. Click here to register and get your score, your standing in relation to others, the loans, and other products you’re likely to qualify for.
Reducing the stress as a couple can be helped along with some basic tips to achieve financial success. One of these is avoiding bad debt – or, if you are already in a debt pit, tackling the issue proactively.
If more than a third of your income goes towards paying your debt, and you are worried and stressed, it’s best to seek help straight away.
One option is debt consolidation, which combines a number of individual debts into a single debt. This can mean, for example, increasing your home loan and using the extra cash to pay off all your loans at a lower interest rate.
Couple and family finances
When you both agree on your money goals, it’s a good idea to work out a household budget together. JustMoney has a handy budget calculator.
Another helpful tip is to have a regular financial check-in. This needn’t be a long and serious discussion, just a chat over a coffee or glass of wine will ensure you’re heading in the right direction.
To celebrate meeting a target, without breaking your budget, you can take a look at a range of deals published by JustMoney.
Whatever means you use to find and maintain your financial harmony, communication is key.
“As with any aspect of your relationship, it’s important not to sweep money matters under the carpet. Deal with financial issues when they happen, together,” says Nicholson.