For love and money

Why the right financial footing makes the strongest foundation for a healthy relationship

Valentine’s Day is around the corner and while money may not buy you love, it certainly can put it to the test.

A 2020 study by Momentum Investments revealed that emotions like fear and greed influence the decision-making of even the most astute investors – which just goes to show how emotions can measurably impact financial decisions even in our personal relations (and especially in our personal relationships).

Financial Adviser at Momentum Financial Planning, Janine Horn says she has seen it time and time again. “One of the biggest and most frequent hurdles I encounter when helping my clients is navigating money as a couple. Yes, every relationship is different, but there are some fundamental principles that romantic partners need to adhere to.”

In the interest of love and keeping your relationship strong, Horn shares her financial tips for your shared journey to success:

Establish shared financial values

“Money is a funny thing,” says Horn. “Everyone sees it differently. It all depends on how money has played a role in your life up until this point. Did you never want for anything in a life of privilege? Or did you grow up where every day was a struggle for survival?”

In Horn’s professional experience, the first step to financially strengthening a relationship is to understand what your individual financial values are, and establish your common ground as a couple.

Is saving the most important thing to you? How about your partner? Saving for what? Or would you rather spend and live life to the fullest? Perhaps you are more frugal and like to be prepared for life’s unexpected twists and turns. These are values that we all have, and when we are in a relationship, we need to identify where are money values align and where they differ” advises Horn. “When you understand this you can clearly define where you are willing to compromise and how to adapt your habits accordingly.”

Air your financial laundry

When you are committed to building a life with someone, Horn warns that skeletons in the closet may ruin the potential for romance. “And let’s face it, thanks to COVID-19, consumers are in a very vulnerable space right now. In fact, the latest Momentum/Unisa Consumer Financial Vulnerability Index declined to its lowest level ever since its inception in 2009. Unfortunately when we feel vulnerable – we can tend to make some dodgy money decision,” says Horn.

She explains that debt, spending habits, income, subscriptions, and possible addictions are the things that your partner needs to know right from the start,” says Horn. “If you are opening up a joint account or planning to share a life together, your financial footing needs to be strong. Don’t hide anything as it will rear its ugly head one day.”

Beyond the beginning of a relationship, Horn says that these kinds of candid conversations about financial issues need to be hashed out at periodic intervals, and dealt with immediately.

Devise a plan of action

Once you know where you as individuals stand, you can finally recognise where the relationship is going. “If you know your values, you know your challenges, and you know you’re in love, you can start your shared financial journey and forge a financial plan as a couple,” says Horn.

You might be thinking about travelling overseas, buying a home or starting a family.

“It's important to make sure you set financial goals together and agree on how to achieve them, starting with a budget,” says Horn.

Advice for success

When it comes to financial planning, the most recent Momentum/Unisa Household Financial Wellness Index, revealed that only 38% of financially well households have a financial plan.

Cleary financial planning can be complicated, scary and frustrating – especially when the global economy has been turned on its head in the last year. As a financial adviser, Horn says there is no shame in admitting that financial planning is complicated – especially if you don’t have a financial background.

“I have seen too many couples enter into financial planning too late. Having a shared financial plan doesn’t mean losing your financial freedom but it means identifying where your financial goals align and co-creating a shared roadmap to get there. There is no substitute for the right advice, especially in such precarious times,” concludes Horn.

ENDS