Johannesburg – As the month of love is coming to an end, financial experts have warned against reckless spending this February.
Old Mutual’s head of financial education, John Manyike, also believes it is vital for couples to discuss matters relating to finance, particularly with Valentine’s Day in the spotlight.
“In most cases, Valentine’s is celebrated by exchanging gifts that symbolise appreciation for our loved one, more so that it will be advisable to also get into the norm of discussing finances as a couple,” he said.
And while the money talk may not be seen as romantic, Manyike believes it is one of the most vital conversations to have to maintain a healthy relationship.
“Love shouldn’t send money sense flying out the window,” he said.
“Love is wonderful. It brings us joy and excitement. However it can also blind us to our partners’ toxic financial habits that can break the relationship.”
Manyike admitted that money is generally a touchy issue in relationships, but he stressed the importance of talking about finances early in the relationship instead of waiting for issues to surface later.
“This could cause financial tension and possibly irreparable damage,” he said.
Meanwhile, an Old Mutual survey involving just over 1 000 people revealed that only 26% of the respondents thought that talking about money was okay on a first date.
In addition, about 42% of people said they would discuss finances before moving in with someone, and nearly 17% before lobola negotiations.
“The most concerning finding is that 15% of the people polled say that money should never be discussed,” Manyike said.
He added that the results of this attitude and not being aware of a potential partner’s earning power and historical debts could be devastating.
“The default for customary marriage in South Africa is marriage in community of property, unless an antenuptial contract is agreed to before marriage, and this basically means all your past, present and future assets and liabilities are joined.
“Historical debts are transmitted from your partner to you automatically.”
Manyike also explained that if an individual’s spouse runs into money problems, and can’t pay their debts, the problem becomes theirs.
“When one partner is sued or sequestrated because of unpaid debts the debt collectors will treat you as a combo and this applies to all debts even if they were run up before marriage,” said Manyike.
Statistics SA data also showed that couples between the ages of 18 and 35 are the most likely to divorce, with various sources also pointing out that money and conflicts over cash are among the ‘Big Five’ causes of people parting.
“Undoubtedly, these statistics will include many people who found that their financial trust in their partner was misplaced,” Manyike said.
Manyike’s list of things to considers before saying “I Do”:
– Financial habits and personal values
Understanding your partner’s financial habits and personal values is key. Financial lifestyle choices are influenced by your partner’s belief system, personal values and habits. Some people may not be financially compatible if there is a conflict of these values.
Historical debts and financial obligations
It is very important to discuss historical debts, current financial obligations and the type of marriage contract you want to enter into. Is your partner paying maintenance for children in their previous life or is your partner taking care of their siblings or mother? Don’t enter a marriage blindfolded, only to deal with the realities of poverty afterwards. The type of car your partner drives is not a sign of wealth.
Your short-term and long-term goals
Be on the same page. Are you saving for a holiday, building an emergency fund, or buying a new property?
“There is no doubt that romance and money are no strangers, so don’t be shy about finances.Speak to your financial adviser about a financial plan for your future,” said Manyike.