While love may keep you and your partner together, money could be what breaks it. According to Medical brief, 20% of couples are quarrelling more than before with some of these issues being financially related.
Finding healthy ways to manage your finances as a couple can ease financial stress and also ensure that everyone involved is protected. These are the five financial mistakes to avoid as a couple to help protect your financial future.
Having one person control the finances
There may be a person in the relationship who has a money personality that makes them better at juggling finances, but it doesn't mean that they should have sole control. Playing to your strengths can be beneficial, but it's also important to remember that you are a team. Therefore, having a transparent conversation over the budget and major purchases can lead to less frustration or financial abuse.
Joining all your financial accounts
No couple thinks of ever splitting from their partner, but things change. Having one joint account to assist with balancing of expenses can be beneficial, but having all accounts linked can be an issue, especially in a divorce. According to StatSA, 4 out of 10 marriages end before their 10th anniversary.
Not planning for the future
The good news is that there are plenty of ways to plan for your financial future by creating a safety net as soon as you can, even if you are a single person. The bad news is when couples don't plan for their future.
This could be in the form of one person only having policies in their name that protect their partner like life insurance, instead of both people having separate life covers. It's crucial to plan for situations where your partner may not be able to provide for you due to death or disability. Therefore, investing in things such as life cover and disability cover can protect both of you from the R2.2 million under insurance gap.
Leaving retirement planning to the last minute
It's easy to get caught up with the financial management of your daily living expenses, setting up an educational trust for your child(ren), purchasing property or paying off of debt you may have accumulated. However, delaying the planning and purchasing of retirement planning can be a ticking time bomb for many couples.
The average man in South Africa lives to the age of 60 years old while women have an extra 7 years that can affect their retirement plan. Saving up while you still can afford it can be something your future self will thank you for. The best time to plan for retirement may have been yesterday, but the second-best time to do so is now. Remember to speak to a financial advisor to find a plan that will be affordable for each person.
Supporting loved ones financially
The reality is that 75% of South Africans are planning on taking care of their loved ones or are already taking care of family members. Having an honest discussion about how you plan on taking care of family members and how you can realistically support your family without putting a strain on your finances will lead to less frustration. Doing this before you make big decisions such as tying the knot can lead to less financial stress and also make sure that you and your significant other are on the same page with handling expenses.
