6 ways high net worth couples can minimise conflict
January 31, 2022
By Jessica Cook
Financial conflict among couples is quite common in today’s society. In fact, money and financial conflict are one of the primary factors that can lead to a divorce. Even high net-worth couples are not free from conflict.
It is often assumed that because you are both comfortable financially, money would never be a cause of dispute between you. However, in practice, money is the root of many problems within a relationship. If you want to ensure that it never becomes an issue with you and your loved one, there are a few simple steps that you can take.
Talk about Money
Keep the lines of communication open when it comes to money. Be careful not to make accusations when talking about it, but instead, discuss the future and your plans, both long and short term. Talk about upcoming expenses and any luxury purchases that you have had your eye on. Be honest and transparent in your spending and expect the same in return – that way, there will never be any nasty surprises to worry about.
Create shared financial goals
It is critical to come to an agreement on the big things, like retirement. For example, do you both want to downsize in retirement and focus on travel? Would you like to relocate to a warmer climate during your golden years? You’d be surprised how many couples never discuss their goals for the future even if they feel confident of affordability. Once you determine your mutual goals, you can create a plan to achieve them together.
Share your Money Views
Everyone has slightly different views on the way they spend their money. Some people are of the opinion that they can’t take it with them when they die, so they might as well make the most of every penny while they can. Others like to only splash out on essential purchases. There is no right or wrong opinion, and it comes down to personal preference. But it is important to learn each other’s thoughts and beliefs on spending so that you can be more understanding of their position.
Keep a Little Bit for Yourself
It can be beneficial to have a joint account for shared expenditures but also to have individual bank accounts. This gives each of you a little privacy and independence and means that you can make smaller purchases without having to check in on one another every time.
However, if you decide to do this, you should still stick to your agreed budget and talk to your partner about major financial purchases. Keeping secrets about money is a quick way to encourage feelings of betrayal and mistrust.
No matter how much money you have, creating a shared budget can help to keep spending under control. A budget keeps everyone accountable and allows you to put money aside for your financial goals. With personal budgets, both of you can spend on whatever you want and wherever you want. But large spending decisions should be mutual, to ensure everyone is happy with the way your shared wealth is being spent.
Schedule time to discuss your finances.
Having a set time to review your finances will ensure that these serious conversations take place, and allow you to regularly review if there is a need for improvement. Even though one person is assigned to tackle the financial “chores” like bill paying, that doesn’t mean the other spouse or partner gets a free pass. There needs to be an ongoing conversation to ensure you remain on track to achieve your goals.
Organising your joint finances doesn’t need to be difficult, but it is important to ensure that the lines of communication are always open. Indeed money can be a sensitive matter even for high net worth couples. Communication and transparency are crucial.
The amount of money you’ll need to enjoy a retirement free from financial constraints will vary depending on your circumstances and retirement plans.
There are various sources of advice that can guide you on the best ways to save, and the best ways to draw income from your saving pots in the future. But ultimately, you’ll only get it right by considering all the different variables for your unique position.
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