First published in the Daily Maverick 168 weekly newspaper.

As Valentine’s Day rolls around, a little out-of-the-box thinking could help you and your loved one create a gift that lasts for years to come – addressing the dreaded money topic once and for all.  

South African debt levels are at an all-time high, with R20.73-billion worth of defaults in the first four months of last year alone, according to the Experian Consumer Default Index released in June last year.

It goes without saying that debt feeds into what are already high anxiety levels and brings complexity and discord into relationships.

“Working to manage your finances effectively together is often vital to building and maintaining a strong and healthy relationship with your significant other, and can bring couples closer,” says Daryl Coker, advisory partner at Citadel.

Sharon Moller, financial planning coach at Old Mutual Wealth agrees, noting that if 2020 changed your financial situation, it is likely to have also affected the dynamic of your relationship.

Although you might not want to discuss money over dinner this Valentine’s Day, avoiding this conversation can greatly diminish your relationship’s resilience. “A couple that plans together tends to stay together,” says Moller. “Sharing your individual dreams, what you’d like your life together to look like, and then aligning these can be an incredibly bonding practice.”

 The elephant in the room

Financial dishonesty can be just as devastating to a relationship as infidelity. “If secret spending impacts your shared financial goals, it can undermine trust. So too can concealed debt,” she says. Although personal finances can be a difficult conversation, especially if one partner earns significantly more than the other or one partner has recently lost their job, open communication means receiving the support you need, both financially and emotionally. 

Avoid blow-ups

There are several easy steps you can take to introduce the conversation with minimum conflict.

Talk to a financial planner. “Consulting an expert who is not emotionally invested in, or influenced by, your money situation – but who understands how much emotional charge it can carry – diffuses tension and makes it easier for you to hear each other out,” Moller says.

Discretionary spend. Agree on a “maximum spend” amount that must be discussed with the other partner before a purchase is made. For example, a maximum discretionary spend of R1,000. Any purchases over this amount must be agreed on by both partners. It might be annoying, but will avoid conflict when you bring home that expensive set of golf clubs or a pair of designer shoes.

Walk the same path. Align your financial goals and decide what you want to achieve in the short, medium and long term.

Bank accounts. Decide if you are going to have a joint account or separate accounts with one joint account. Maybe you want to split all expenses 50/50, or split them differently, based on how much each partner earns. You might choose to have one partner handle “big finances” such as the bond instalment or rent and investments while the other handles “small finances” such as the weekly groceries and running the household. Whatever you decide, make sure that you are both happy with the split so that there is no simmering resentment on either side.

Investing. “Examine your investment strategy as a unit. An overall view of your collective investments, and understanding what you are each invested in, will help you identify any areas where you may not be as well-diversified as you thought,” Coker says. For example, you and your partner may both have extensive exposure to property within your portfolios, making your overall portfolio overly property-weighted. Coker notes that it is also useful to understand what savings vehicles you are each invested in, whether this is a pension fund, retirement annuity, tax-free savings account or other. “This will help you to determine whether you may be overweight in retirement savings vehicles and do not have enough discretionary savings to buffer you both against unexpected events such as retrenchment,” he says.

Estate planning and second marriages. Estate planning can be a tricky subject but becomes even more so when you are in a second marriage or relationship. It is vital that your spouse is aware if you are leaving some assets to children from a previous marriage, because this is important from a risk planning and estate planning perspective. If you have young children from a previous marriage or relationship, remember that you have a maintenance obligation that should be provided for in your estate planning to avoid any claims on your estate. Coker advises that your partner should be able to find the details of any life policies and retirement funds – and know who the beneficiaries will be.

 Free financial literacy resources

Once you have opened the door to the money conversation, it could be a good idea to do a free financial literacy course with your spouse or partner. Even if you think you know everything there is to know about money, you may find yourself learning new tips and tricks from a course. Besides the plethora of self-help videos available on YouTube, the resources on the internet are wide and varied.

 Smart About Money is a free resource based in the United States. If you change the dollars to rands, the financial concepts remain the same. Bonuses include free downloadable tools such as a “spending detective worksheet” and a “smart goals worksheet”. This website is going to close in July this year, so download the tools while they are still available.

In Charge is also an American website. This resource offers useful information about everything from budgets and investing, to tips and tricks to help you be more thrifty when shopping for groceries, to personal finance calculators.

Money Academy is the home of The Wonga Money Academy, which offers easy, quick videos to take you through the financial steps of budgeting, saving, investing and most importantly, debt.

Freakonomics is packed full of fun podcasts that you can listen to together. Personal finance topics include “Everything you always wanted to know about money (but were afraid to ask)”; and “The stupidest thing you can do with your money”. This site leans heavily towards American topics, but if you have the patience to sift through the topics, there are several that could work for a South African audience. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores.