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Red roses last a week - Financial planning lasts a lifetime

14 Feb 2017

Red roses last a week – Financial planning lasts a lifetime

February is the month when new relationships flourish and long-standing relationships are renewed. Money plays an important role in the success of relationships. When it is in scarce supply it puts pressure on relationships and immense strain on marriages.

Before you rush out and blow your budget on expensive flowers and dinners this Valentine's Day, consider the fact that red roses last a week, but solid financial planning can last a lifetime. So, if you're in a relationship, this Valentine's Day, make an important financial commitment because it may be the catalyst that makes or breaks the future of your relationship.

Palesa Thloloe, a certified financial planner with Liberty says, "Budgeting for and planning your financial journey is as important for couples as it is for single people. However, if couples can work as a team and commit to a clear financial plan that is beneficial to both, from the beginning of the relationship, you increase your chances of achieving financial success and a more stable relationship."

Serious financial hurdles that could threaten your relationship

Under the current challenging economic environment, couples are faced with constant threats to their financial stability. As a result, couples need to be able to overcome serious financial challenges.

Thloloe says, "Debt is one of the biggest financial challenges couples need to deal with. It could be worse for new couples planning to commit to a long-term relationship – Where one person could bring in a lot of debt into the relationship, which the other partner may need to help settle before they start building their wealth."

It could also be difficult for couples to decide who pays for what. For example, when moving in together, often you find that one partner already owns a property. This partner would stick to paying the bond while the other partner pays for consumables like food and groceries. This could create some animosity. If the relationship fails, the partner who was paying for consumables leaves with nothing.

"A good financial management strategy that could help to avoid this situation is to share the consumables and then invest a portion of the other partner's income into Unit Trusts, ETFs, or Endowments. This could be useful later on in the relationship or used to buy assets for the partner who has no assets should the need arise," says Thloloe.

We all come from different backgrounds, having learned different skills to managing debt, spending, investing, or budgeting. Merging the two different skill sets could be a challenge. Some people are likely to believe that their way is better than someone else's way.

Financial infidelity is another serious threat to relationships. Some people don't want their partners to know how much they earn, spend or invest. This secret approach could become a major hurdle, especially if this partner is spending money recklessly and putting the financial stability of the relationship in jeopardy.

Thloloe provides a solution to this challenge, "My recommendation here is to involve a qualified financial adviser or certified financial planner early in the relationship before a commitment to any form of union takes place. This will help you address financial infidelity before it becomes a problem in the relationship."

Four benefits of joint financial planning

According to Thloloe, couples that plan their finances with the help of a financial planner are able to pool their resources and financial management skills to improve their chances of financial success. This will result in the following relationship strengthening benefits:

  • Improved transparency – Financial planning as a couple fosters a more stable relationship because both parties need to be open about what they have, what their long-term financial goals are and how they plan to work together to reach these goals.
  • Unwavering trust and honesty - People have a tendency to lie to themselves about their own spending habits, just as they might lie to themselves about their own eating or health. Thloloe says, "An open discussion about the good and the bad habits of financial management with your partner can open the door for more honest conversations."
  • Full commitment and understanding – With both parties working towards a common goal, the couple is able to better commit to the strengthening of the relationship. If financial challenges happen to arise, both parties can realign their spending habits to ensure that each party achieves their financial goals. This shows commitment and love for each other.
  • Better communication – Finances and just talking about money is a taboo for many cultures. However, if couples are able to communicate openly about their finances, chances are, they can communicate better on other parts of the relationship too.

"At Liberty we believe that financial planning for couples is essential for a wealthy financial future. So, if you really love someone, take the time to have an open and honest conversation about your finances," concludes Thloloe.

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