Love is wonderful. It brings us joy and excitement, however it can also blind us to our partners toxic financial habits that can break the relationship.
As we celebrate the month of love, John Manyike, Head of Financial Education at Old Mutual reminds us that money talk is just as important as pillow talk.
“Money is generally a touchy issue in relationships, however I must stress the importance of talking about finances early in the relationship instead of waiting for issues to surface later, causing financial tension and possibly irreparable damage” says Manyike.
An Old Mutual survey involving just over 1000 people, showed that only 26% of the respondents thought that talking about money was okay on a first date. About 42% of people said they would discuss finances before moving in with someone, and nearly 17% before lobola negotiations.
“The most concerning finding is that 15% of the people polled say that money should never be discussed. The results of this attitude and not being aware of a potential partner’s earning power and historical debts could be devastating.”
“The default for customary marriage in South Africa is marriage in community of property unless an antenuptial contract is agreed to before marriage. This basically means all your past, present and future assets and liabilities are joined. Historical debts are transmitted from your partner to you automatically.
If your spouse runs into money problems, and can’t pay their debts, the problem becomes yours. When one partner is sued or sequestrated because of unpaid debts the debt collectors will treat you as a combo. This applies to all debts even if they were run up before marriage,” says Manyike.
“Statistics SA numbers show that couples between the ages of 18 and 35 are the most likely to divorce. Various sources also point out that money and conflicts over cash are among the ‘Big Five’ causes of people parting. Undoubtedly, these statistics will include many people who found that their financial trust in their partner was misplaced.”
What you should know about each other before you say, “I Do”, he says, should include:
- Financial Habits and Personal values. Understanding your partner’s financial habits and personal values is key. Financial lifestyle choices are influenced by your partner’s belief system, personal values, and habits. Some people may not be financially compatible if there is a conflict of these values.
- Historical debts and financial obligations. It is very important to discuss historical debts, current financial obligations and the type of marriage contract you want to enter into. Is your partner paying maintenance for children in their previous life or is your partner taking care of their siblings or mother. Don’t enter a marriage blind folded only to deal with the realities of poverty afterwards. The type of car your partner drives is not a sign of wealth.
- Your short-term and long-term goals. Be on the same page. Are you saving for a holiday, building an emergency fund, or buying a new property?
“There is no doubt that romance and money are no strangers. so don’t be shy to open about finances, speak to your financial advisor about a financial plan for your future,” concludes Manyike.
