Many of us have been influenced and molded by the experiences, decisions, values, and behaviours of loved ones and what we have observed since early childhood. In some respects, we catch our money habits along the way both good and bad from those around us. Of course, that is not to discount the impact of our own money experiences.  

Quite often, unless we are prompted to question why we do something, we go into autopilot mode. This is true with money as we get into comfortable patterns of behaviour. 

Our relationship with money evolves as we go through life. When we are starting out, it is about managing the way we behave and interact with money and moving towards things that are important to us. As we enter into a relationship, we add the complexity of blending two money personalities, financial situations, and goals and aspirations. It becomes much more of a balancing act. 

This is not a suggestion that you need to be the same, but rather that the more mindful you are of each other’s tendencies and preferences, the more you can work through how to best navigate these differences. 

Early in relationships, money conversations are limited, which means we may not understand how our partner interacts with their finances or the impact their financial situation brings to the relationship. As we grow together in a relationship we get into rhythms and habits, and we work out what role each of us will have in managing the finances. We can also develop more shared goals and direct our finances towards them. Sometimes this works, and sometimes it doesn’t. To a degree, we become responsible for another person’s financial behaviours. 

For many, money can be the source of conflict or anxiety and differences in our relationship with money can lead to much tension. If we add to this the fact that many people don’t actively talk about money and prefer to avoid the conversations it can fester and build up.  

I was recently talking to Sam Minuti, one of our advisers based in Hervey Bay about the conversations he has around managing money, particularly when it comes to family members.

What he has observed over many years was the dangers of individuals bailing out family members. Despite good intentions, many of these inevitably end in resentment, conflict, or in extreme cases legal action. Much of this was due to decisions being made based on emotions rather than taking the time and making expectations clear from the outset. Is it a gift or is it a loan? If it is a loan, should we get a basic agreement drawn up by a qualified person? 

This is so true when it comes to the bank of mum and dad. Are we creating a dependency rather than teaching skills and resilience to the recipient? As a parent, I know it is tempting to always help our loved ones, but I always prefer to be the safety net rather than the first call. Individuals who are naturally very generous and giving need to be careful that this tendency is not taken advantage of or puts their financial security at risk. 

The other point that Sam raised was that often when it comes to relationships and life event changes, finances can be an afterthought and leave the survivor in a position where they may not have the skills or confidence to manage. This can lead to a lot of stress and anxiety. An example of this would be where due to ill health one member of the relationship cannot do what they would normally do in terms of managing money. A more significant issue is when the partner is no longer with us. Another example would be updating wills and wishes where there is a separation or divorce which is, unfortunately, becoming more common in our community. 

So given the above, here are some tips to consider for having a stronger money relationship with your partner and extended family members:  

• Take the time to understand your and your partner’s relationship with money and habits. 
• Work out where there is alignment and where there are differences. Based on this, create a plan to navigate them together. 
• Develop a joint money plan together. 
• Be clear and specific about how your share the responsibilities and money decisions, but be careful not to become captive. 
• Make the time to sit down regularly and discuss/review how the plan is going. Be mindful of changes and their impact – You could even make a date night out of it to lighten the conversation!  
• Be sure to break up discussions into meaningful bite-size chunks. 
• Support family members where you can but don’t put your financial security at risk. Have clear expectations and document them if necessary to avoid issues down the track. 
• Build up a rainy-day reserve for unexpected events and discuss how to manage the finances should your circumstances change. 
• Be mindful of where you take advice from as everyone’s situation is unique and the barbecue recommendations from a friend or family member may not deliver the best outcomes for your circumstances. Seek qualified professionals to assist. 
• Involve a third party to assist who can take out the emotion and identify blind spots if you are having difficulties.  

Money itself is not the dagger to a successful money relationship with loved ones. Making hasty emotional financial decisions, a lack of planning and a lack of mutual respect and communication can be. 

The good news is that you don’t need to deal with these complexities alone. There is a range of support services available. A good starting point is the government website https://moneysmart.gov.au/ which has a range of resources to assist.