Couples tips: How to split costs and avoid money troubles
Sara-Jayne Makwala King gets expert advice from Core Wealth's Kirsty Scully, chair of the Financial Planning Institute.
Couple working on finances, household budget. Pexels/Ron Lach
Disputes over finances are often cited as one of the main reasons that cause a couple to break up.
Marking World Financial Planning Week over this past week, Sara-Jayne Makwala King gets some tips to avoid money troubles with your partner.
She chats to certified financial planner Kirsty Scully (Core Wealth), who's the chairperson of the Financial Planning Institute of Southern Africa.
As always, it comes down to communication around what can be a tricky subject.
Scully notes that people in a relationship will come from two different families who likely had different ways of dealing with finances.
"The way your parents dealt with money would be different to the way his or her parents did, and because of that it puts us into the situation where we could view things differently."
"One needs to be asking each other things along the line of what are your views on spending money... If it's a couple wanting to get married for example, what are your views on spending for the wedding."
Kirsty Scully,Senior Financial Planner - Core Wealth Advisory Services
How to split costs can be a thorny issue, especially considering the existing gender pay gap in South Africa when it comes to a heterosexual couple.
Scully suggests having a joint bank account, along with your own individual accounts.
Your salary would be paid into your personal account, and then you'd make a decision about what your joint expenses are, to be paid out of the joint account.
These would include things like a home loan, assuming you're buying a home together, and costs linked to your property.
Food and school fees would also fall into this category.
"Let's say your joint expenses add up to R50 000 a month, then you'd say we must each put R25 000 into the joint account."
"It makes things easier even when you just go out for dinner, then it's not a case of 'he paid this time and the next time she pays', because you just pay out of the joint account."
Kirsty Scully,Senior Financial Planner - Core Wealth Advisory Services
What if one partner earns considerably more than the other?
A fifty-fifty split for the joint account would not be fair in this instance Scully says, because one partner might end up paying all of their money into that joint account.
She favours a percentage of income as the fairest solution.
"Say that Sam earns earns R40 000 a month and Alex earns R60 000 - it means Sam is earning 40% of the joint household income and Alex 60%, so when it comes to the actual joint household expenses you can split it up like that."
Kirsty Scully,Senior Financial Planner - Core Wealth Advisory Services
A problem in South Africa is that most banks do NOT offer the option of a joint account, but there is a practical way to get around this.
Scully suggests that one of you opens an account which you CALL your joint account, and you both have access.
It's vitally important that each partner has a card for this account, as well as online access so that they can go and check what's happening with it, she adds.
Other important questions to discuss and agree on include what is an acceptable level of debt, longterm savings and an emergency fund.
A good idea of course is to get professional advice and to discuss these issues with a financial planner.
Scroll up to the audio player to hear Scully's detailed advice