In most families there are two types of people – the savers and the spenders. Statistics suggest that many couples argue or even divorce over money issues, and this is predominately due to either not making enough money or spending too much money.
It is important to understand your attitude towards money; mostly it is formed during our childhood. If someone had parents that were constantly arguing about a lack of money, this often turns them into a dedicated saver as they don’t want to be in the same position as their parents. Conversely, a person who grew up in a family that didn’t talk about money, or where money posed no issues, often emerges as a spender because of the lack of financial guidance.
Let’s be serious: in an ideal world we would all have a partner with the same financial mindset as us; but since opposites attract, it seems spenders often end up with savers. This can be a recipe for a relationship disaster, so the question has to be asked: can a saver and a spender both be happy when it comes to money?
Like all good relationships, it is about meeting in the middle and negotiating where your opinions differ so that you can find common ground. Having these discussions is often uncomfortable and can lead to arguments; however, not talking about finances and kicking the can down the road can turn into a long-term financial issue and will create resentment.
If you have decided to keep separate bank accounts and not to co-mingle finances, which is a growing trend with younger couples or second marriage couples, you must be aware that this approach only eliminates surface issues for a spender and a saver. The reality is that the financial decisions you make in a long-term, committed relationship do affect your partner. For example, if your husband is constantly reaching his credit card limit and using his overdraft to cover his portion of the bills, this could make accomplishing any joint financial goals almost impossible.
Now, if you are a couple that co-mingles their finances, it is imperative that each person understands that even though one person may earn more than the other, when it comes to financial decisions that impact the family those decisions are equally shared. This means both the spender and the saver need to agree on a broad budget that includes an element of recreational spending, debt management, and the development of an achievable savings goal that you are both committed to.
When you both agree on big financial decisions, the saver will also have the peace of mind that comes with knowing that the spender will not stop the couple from achieving important financial goals. As a result, the saver is far more likely to feel relaxed when the spender makes a couple of frivolous purchases.
On the other hand, if you are in a situation where your partner is reckless with their spending and you are concerned about the long-term financial implications for your own financial future, contributing extra to your pension plan through voluntary savings might be good way to protect yourself. Instead of having just the mandatory 5% deducted from your pay cheque each month and your company’s matching 5% contribution, if you can afford to have another 1 or 2% per month deducted straight off your pay cheque and directed into your pension, these additional savings will grow over time.
At the end of the day, a saver and a spender can easily work together and grow old together, but open communication and compromise will be key!
– Carla Seely is the Vice President of Pension, Life and Investments at Freisenbruch. If you would like any further details, please contact her at email@example.com or call +1 441 297 8686.