Why you need to know about your partner’s finances
Don’t know what your other half brings in? You’re not alone. According to research by Noddle, a UK-based credit specialist, almost half of married people don’t know how much their spouse earns, and a third divulge finances with their loved ones on a need-to-know basis only. Whether your reasons are based on habit or insecurity, there are solid reasons you need to share the details with your partner. Women tend to outlive men – staying in the dark about your finances is a dangerous gamble on your future. A Time magazine survey also shows that more women than ever before out-earn their partners now, which means that men may need to work with their partners to not only renegotiate family responsibilities, but the financial responsibilities too. Sharing is very likely to be beneficial for you both.
There’s another reason that you both need to be part of the decision making – you both have strengths to contribute to financial planning. It’s been shown that many women and men have complementary financial skills. Men are more confident to make financial decisions and willing to take risks that will ultimately build their wealth; women tend to be more conservative, risk averse and spend more time researching their possible investments. Balancing your styles, with a diversified portfolio, will help you achieve a common goal.
How to do it? Make time twice a year to sit down with each other, or your financial adviser, to crunch the numbers. How have your salaries adjusted since you last met? What do you owe in debt? How do these factors affect your future financial goals? These are crucial to get out in the open, even if you have decided to keep money and investments separate. Remember, however, if you invest your money together the fees should be lower, which can improve what you end up with at retirement.
This combined strategy can only work if you have agreed on common goals. Do you want to spend your retirement travelling, while your partner wants to spend the golden years on a quiet smallholding? You need to get your expectations for your future in line with each other. Another important ingredient for success? Stop keeping money secrets from each other. There should be no more ‘white lies’ about how much that mountain bike cost, and you need to fill your partner in about what you expect to inherit. It all comes back to communication. It’s time to get talking…
If you’re not already investing with Prudential, contact your financial adviser or our Client Services Team on 0860 105 775 or at email@example.com