Money & relationships - are you a financial dud?

If you don’t think you size up in the managing-money department, check out these 11 tips for when financial opposites attract.

You and your other half may be on the verge of moving in together, adopting a couple of fur-babies, having kids, opening a joint account, or buying a property.

If your partner is on point when it comes to managing their money, whereas you don’t have the faintest idea (do you even know how much cash is in your account right now?), it’s a conversation that mightn’t end well, particularly if you’re not even sure what you earn, owe, and spend.

If the thought had crossed your mind (after all, one third of couples cite financial stress as a key negative influence on their relationship1), but you have no idea where to start, here are some simple ways you can demonstrate to that special someone, you don’t need “financial babysitting” no more.

How to flex your financial muscle

Know exactly what money is coming in and going out

If you're wondering why some people seem to have more money than you do, while it often comes down to salary, sometimes it comes down to smarts - and creating a budget will often play a big part.

It doesn’t have to be too hard of a task either. Simply start by writing down what money you’ve got coming in (from your job and/or elsewhere), what cash you need for the mandatory stuff (don’t forget any repayments owing), and what dough you’d like to have left over for the fun stuff.

Once you’ve done that, you’ll more easily be able to identify where you could cut back and where money might be saved.

Stop borrowing cash from mates and loved ones

When you’re in a bind, while you may be tempted to ask for a hand-out, it can put strain on relationships, particularly if it becomes a regular occurrence and you don’t pay things back on time.

The person you’ve borrowed from might need the money back before you can repay it, start to judge your spending habits, or even end the relationship, because they’re over you asking for cash.

Reduce your debts or you may have problems borrowing later on

Average household debt in Australia is around four times what it was about three decades ago2, which is why reducing debt is high on many people’s to-do lists.

Not only that but did you know that late payments can impact your credit rating, which means next time you go to borrow money, you might not actually be able to?

Here are some ways you can tackle mounting debt:

  • Consider setting up alerts or direct debit payments to help you stay on schedule
  • Try to pay the full amount owing, or you’ll generally still incur interest on the balance leftover
  • Look at whether you can afford to make extra repayments
  • Consider rolling your debts into a single loan with a lower interest rate.

Don’t pay more than what you have to

Research shows Aussie households could save up to $1,086 on their electricity bill every year by switching from the highest priced plan to the most competitive on the market3.

Now apply that thinking to your phone, wi-fi, credit card and other providers, and you might be pleasantly surprised by the savings you could make annually (c’mon, it’s worth a few phone calls).

If you want help, comparison sites, such as Compare the Market, Canstar and Mozo, can do a lot of the legwork for you.

Kick the bad habits or at least try to cut down

Aussies spent $10.7 billion on smokes, $6.7 billion on gambling and lotteries, and $5.8 billion on drinks at the bar last year alone4, so cutting back where you can might be worth a thought and reduce people in your life nagging you about it.

Easier said than done? Sure, but if you consider the other things you could put your money toward (an overseas trip might be nice) and that findings reveal those who persist in these areas could save more than $20,000 a year5, healthier choices might not sound like too bad of an alternative.

Cut out the secret spending

Nearly one third of Aussies in relationships spend money they don’t tell their other half about6. And, with about 85% of respondents in a survey by Relationships Australia indicating that financial problems were likely to push couples apart7, honesty and planning together might be a game changer.

Show you care about the future

If you’ve put thinking about super on the backburner, you might want to think again, particularly depending on how you and your partner hope to spend your years after you finish working.

With almost $18 billion worth of super waiting to be claimed by Aussies right across the country8 (you may have changed jobs and opened new super funds along the way that you’ve lost track of), you might discover super you didn’t know you had. If you’re with AMP, we can even help locate it for you.

Meanwhile, you might also be interested to know that over a 12-month period $2.85 billion dollars in super wasn’t paid to employees by their employers9, so it’s worth taking a moment to also check you’re getting what you are owed.

In short, if you get paid over $450 a month, no less than 9.5% of your before-tax salary should be going into your super, so check your payslip and if something doesn’t look right, speak to your boss or contact the ATO.

Have an emergency stash for the unexpected stuff

An emergency fund can give you (and your partner) peace of mind, as you’ve got a bit of savings up your sleeve to pay for unexpected bills in the event of a financial dilemma – broken phone screen, car troubles, chipped tooth, parking fine – you get the gist.

It also reduces the need to rely on friends and family, and high interest borrowing options, such as credit cards or payday loans, which could see you pay back a lot more than what you borrowed.

Check you have the right insurance for you

Having personal insurance (whether you take it out through super or via an insurance company, broker or adviser) may help you to still meet your financial commitments if life throws you a curve ball.

With approximately one in five Australian families to suffer an unforeseen event that will leave someone incapable of working10, checking you have the right cover and enough of it, is important.

Keep in mind you can still have fun on a budget

If you’re thinking this all sounds great, but you’re social life could take a bit of a blow, the good news is there are a number of inexpensive ways to have fun.

One simple one might be to go where the specials are at and look out for two-for-one offers and other cheap deals. TheHappiestHour can give you some ideas, and you may even find some new venues in different suburbs you haven’t tried along the way.

Prioritise the things you want to do in life

While getting your financial affairs in order and learning how to consistently manage your money isn’t something that’s typically done in a day, the good news is, once you’ve nutted out some of the above points, prioritising your short, long-term and shared goals might seem more achievable.

If you’re interested, the top three savings goals for Australians is currently saving for a holiday, putting money toward an emergency fund, and buying or renovating a home11.

Looking for more insights?

Hopefully some of the above tips will help you up your game in the managing-money department, so that you and your partner can work more efficiently as a team going forward. And, if you are looking for some additional tips, try our free managing money education module, and check out these articles:

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters. AMP Bett3r Account is issued by AMP Bank Limited ABN 15 081 596 009, AFSL 234517. Consider the terms and conditions available on request by calling 13 30 30 or at amp.com.au/bett3r and whether this product is appropriate for you. Fees and charges apply.

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