CO-BUDGETING

Yours, mine and OURS

From splitting the bill to signing a lease: a couple’s guide to co-budgeting like pros.

ACCORDING TO THE LATEST Stats SA Marriages and Divorces report, four out of 10 South African marriages don’t make it to their 10th anniversary. Furthermore, US financial counselling company Ramsey Solutions study* notes that arguments about money are the second most cited reason that couples divorce (after infidelity). That means that setting a healthy co-budgeting foundation – one that both partners agree to and feel is fair – could mean the difference between happily ever after and Splitsville. And it’s a bit more complicated than just going halvies on rent, particularly if one of you earns more.

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Every couple handles budgeting, spending and saving differently. Speak to a financial planner to get personalised advice on how best to tackle your budget. Call 086 123 5433 to book an appointment.

How to get on the same page

While we wouldn’t suggest bringing your balance sheet to a first date, a conversation about how you’re going to pool and spend your resources will eventually be necessary if you want your relationship to stay the course.

“Communication about finances in a relationship is key,” says FAMSA social worker and relationship counsellor Sandy Jackson. You may assume that because you have the same taste in series and Sunday breakfast spots, you share similar views on money. However, this isn’t guaranteed. “Individuals in a relationship often have differing attitudes towards, and expectations of, money,” says Jackson. “This can be due to factors such as family history, different ‘money personalities’ and differing financial goals.”

Talking about finances may feel like a mood killer at first, but it’s the best way to explore your different attitudes to money and

get on the same page. “The initial vulnerability and discomfort could prevent many financial challenges arising at a later stage,” says Jackson. Here’s how she recommends approaching the subject: 1 Schedule a time for the discussion when you’re both prepared and mentally open to the topic. 2 Keep the conversation goalorientated (rather than judgemental). 3 Speak honestly to each other and listen attentively. 4 Create a plan that is beneficial to both partners. 5 Commit to sticking to the plan, and to being honest if you accidentally deviate from it.

In need of relationship couselling? Call FAMSA Western Cape on 021 447 0170.

How to co-budget, whatever relationship stage you’re at

WHEN YOU’RE DATING… “I would suggest you ‘go Dutch’ or take turns to pick up the bill,” says financial planner at Pinnacle BlueStar, Jyoti Gopee.

WHEN YOU’RE ATTENDING WEDDINGS AND GOING ON HOLIDAYS TOGETHER… “Have open conversations with your partner to set ‘couple goals’ for these spending categories,” says Gopee. “This will help you avoid a misalignment in goals, and discomfort or uneasiness relating to money matters.”

WHEN YOU MOVE IN TOGETHER… “Draw up a list of living expenses and decide which ones you are both in agreement to share,” says Gopee. “You could split these 50-50, or each take full responsibility for specific expenses.” For example, one of you handles insurance and medical-aid payments while the other takes care of rates and utilities.

Another route you may take is to share expenses according to the ratio of your respective net incomes, says Gopee. “For example, Partner A earns a net income of R10 000 per month and Partner B earns a net income of R5 000 per month. Let’s say their total living expenses come to R12 000 per month. If they allocate expenses proportionally, it could look like this:

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Partner A: (R10 000 ÷ R15 000) x R12 000 = R8 000 Partner B: (R5 000 ÷ R15 000) x R12 000 = R4 000

That means Partner A should contribute R8 000 per month to the expenses, and Partner B should contribute R4 000 per month.” rule out a divorce or even the death of a partner. If your partner passes away, your joint account may be frozen, which carries a cash risk for the surviving partner who no longer has access to the funds in that account.”

What about combining debt? “When co-budgeting, pre-existing debt should not be combined,” advises Jackson. “Debt remains the responsibility of the person who incurred it. Any loans should remain in the original owner’s name. One partner can help the other to develop a repayment plan, but they should not be paying for their partner’s debt. Sharing pre-existing debt often causes long-term resentment.”

This is not a one-and-done activity, either. “Ideally, a couple should set up regular appointments with one another to discuss their finances and the progress they’ve made,” says Jackson. Try to make these chats as enjoyable as possible (in your pyjamas, with pizza, perhaps?) and celebrate your wins to reinforce all the positive action you’re taking.

One partner can help the other to develop a repayment plan, but they should not be paying for their partner’s debt.

WHEN YOU’RE MARRIED… Should you pool your resources in a joint bank account? “I’m very hesitant to encourage joint banking accounts for couples,” says Gopee. “Poor management on the joint banking account may negatively affect both of your credit ratings, which will impact lending rates for any future credit applications. Life bears no certainties either, and you cannot