When we meet a potential partner we will consider things like how they react to a waitress at a restaurant or how they treat their nieces and nephews. However what can often be overlooked are bank balances or spending habits. Asking questions about debt, savings, investments or who is paying for what can be tricky subjects to approach. We tend to think of money as an awkward topic and we generally don’t do well in Ireland discussing money matters.
Financial advisor, John Lowe of the MoneyDoctor.ie said all couples should come clean on money matters early on in a relationship.
“When a couple disagrees about money, it is almost always because they each hold different money beliefs. In an ideal world one would discuss money with a future partner before making any sort of commitment, as this would allow you to check that you are financially compatible. However we don’t live in an ideal world and most couples will find themselves tackling financial issues after they have been together for some time,” he said.
Financial compatibility does not have to come down to how much money you each earn, it is more about your approach to money. Are you a budget hotel type or is it five star or nothing? Do you save most of your wages each month or are you waiting for your pay to come in to be able to afford a take away coffee? Or do you think private school is a waste of money or a necessity?
As relationships progress people will build more robust lives with each other and the topic of money will keep arising. People look and approach money differently but there has to be an understanding and respect in managing finances. Key too is being transparent with each other and putting everything on the table.
Joey Sheahan, Head of Credit at online broker MyMortgages.ie said that he deals with couples on a day-to-day basis and sometimes a lack of communication between each individual’s finances can be an issue. One area to consider is online shopping, according to Mr Sheahan.
“The perils of gambling in this country have been well-documented. Less has been said about online shopping and while the problem is nowhere as big, its impact on the finances of people throughout the country should not be underestimated. The ease at which people can purchase goods and services online and the fact that they do not have to physically hand-over the cash has made it all too easy for many people to spend money that they simply cannot afford to spend.
“Anecdotally we have come across several cases where couples have to come to us to start their mortgage application process, only for one party to learn that they may not be saving the €1,000 per month that they thought they were, as the other party was spending some of these reserves on a regular basis, buying clothes or betting on horses for example.”
Mr Sheahan said that being honest and open about your finances when you’re in a relationship is very important, particularly if you are married and are entering into a huge financial commitment like taking out a mortgage.
According to Mr Lowe, communication is key and if you don’t communicate, you will not know what the other person is thinking.