(06) 353 8655
(06) 353 8655
It’s not always easy to talk about money within marriages for two main reasons; guilt and accusation over spending that you may not have both agreed to, and not understanding how to move forward on money issues.
How do you get out of your overdraft? How come your friends go on overseas holidays and you never can? Why do you seem to spend every last cent every payday, despite recent pay increases? Should you have separate bank accounts? How do you save for your next car? Do you get annoyed at your partner’s spending habits? Should you cancel any insurance?
These are very common questions. Not knowing how to move forward financially is the cause of many arguments and even relationship breakups. Antagonism and argument will never work, but are much more likely to cause resentment and bitterness which makes it so much harder to get on track financially.
A good way to fix this is to get a non-emotionally involved party to go through things with you. The three initial areas to focus on are BUDGET, BORROWINGS and BACKSTOP.
A budget will invariably involve compromise and often fails due to it being unrealistic. We prefer for clients to think of this as their ‘spending plan’; a set of priorities for where they would like their cash to be allocated.
Borrowings are where things can go badly wrong and are usually related to overspending or succumbing to the ‘instant gratification’ value so prevalent in society. Short-term borrowing is a trap too many fall into (and then spend months digging their way out of the hole), however structuring big debts such as a mortgage the best way can save thousands of dollars of interest over the mortgage lifetime.
The backstop will consist of a suitable emergency fund and the right insurance protection. We usually recommend an emergency fund of 3-6 months’ worth of normal household expenses, in part so that you can ensure that insurance protection is in place for only the really big disasters (such as never being able to work again). We find that most people have no real idea of how different types of insurance can work together, or what the different covers are actually designed to do. Utilising a professional adviser should result in you having an appropriate insurance portfolio that is affordable.
When you get these basics right, and are working together as a team, you are much more likely to have a solid financial foundation from which to create long-term wealth. That’s when financial planning becomes much more interesting (and valuable); as assessing investment opportunities and strategies for wealth really helps the momentum towards realising your goals and dreams. This can include utilising KiwiSaver effectively through to building appropriate property, share and/or managed fund portfolios – tailored to you.
We can help with all of these aspects of your finances – no matter where you are at the moment!