Money may make the world go round but when it comes to relationships, finances and friendships (or love) don’t always mix. Of course, it’s difficult to separate money and relationships in some circumstances, so here are five traps to try and avoid.
Never let one person be fully in charge of the finances
The reality is that some people are better than others at managing money but on the flip side, it also makes it easier to hide your true financial situation if only one person controls the finances. This can lead to a poor credit rating for both of you if bills aren’t paid, the lack of a financial buffer if savings are spent and added stress that really isn’t good in any relationship.
Never a borrower or lender be
This is true in any relationship, be it romantic, family, friendship or business, borrowing or lending money has been the downfall of many a partnership. No one likes to see a loved one or friend go through financial hardship but you really need to ask yourself why that person is in the situation in the first instance before you hand over your cash. And alternatively, if you’re asking someone to lend you money, think about the position you’re putting them in if they have to say no.
Don’t splash your cash and think you’re doing someone a favour
If you’re a little flush with funds, it may seem like a nice thing to do to treat a loved one or friend, and that’s fine, but don’t go so far as to make them uncomfortable about not being able to return the gesture. And by the same token, if a friend or lover is always paying for your share of the bill, just keep in mind that the longer you let them, the more chance there is that conflict and bad feelings will arise
Don’t be embarrassed about talking money
If you don’t think you can afford to do something or think that a purchase should be put on hold to clear some debt, don’t be afraid to say so. It’s easy to get caught up in the moment and just let those awkward conversations slide, but when you’ve committed a large chunk of cash to a holiday of a lifetime and your mortgage payment is past due, there is likely to be more embarrassment coming your way. Being open and honest about money and spending is the only way to stop it from being a divisive issue in any relationship.
Don’t be afraid to keep your finances separate
If you’re in a new relationship it may seem romantic to share everything from your bed to your bank account, but more often than not these days couples are choosing to manage their own money. This is often the case when one person enters the relationship with more than the other. The one potential downfall is when it comes to apply to Centrelink for any benefits, your de facto partner’s income and assets will be assessed as part of your claim.