Money, Money, Money
What does it mean to you?
I'm going to be honest with you - I believe if you are in a committed relationship, raising kids together, you need to pool all your resources.
Whether it is sharing childcare, the household tasks, the mental load or money. You need to be in this together.
I still remember the motivational motto we had when used to trudge round Dartmoor in the winter when I was a teenager, preparing and competing in the Ten Tors Event.
T.E.A.M. = Together Everyone Achieves More.
It was important when I was a skinny, slightly awkward 15 year old with an oversized backpack and it’s important now as a Dad and Husband.
Breadwinner or Kept Man?
Many of you male readers will be the primary breadwinner. I'm not even close to that in our house and never have been. When my wife and I met, she earnt 50% more than me, by the time we got married it was 100% more and now it's an even bigger gap. We joke that while she brought a flat and equity to the relationship, I brought a 5 year Ford Focus.
But none of that matters because
1) We have clear family goals and a plan to achieve them.
2) We understand how much money it costs to meet those goals.
3) We pool our resources - in all parts of our life.
We're in it together - with a single current account, with various saving accounts for different family goals.
The 2 things you need to do…
There are two things I want you take away from this post
If you are the primary breadwinner you wield power, both spoken and unspoken. You need to use that power wisely, your relationship will fail if you do not respect your partner’s ambitions and desires and to be honest you don't get to be the breadwinner unless your partner is raising your children - she is enabling your ambitions by being there for the kids.
1) As a couple you need to be clear on your individual and family goals.
You need to sit down and discuss it properly. Maybe your partner doesn't want to be tied to the school run for 10 years. Do you even know? Maybe you don't want to be working another 20 years for 50 hours a week in this job?
Not sure where to start? Click here and get hold of the free exercise you need.
As Chris Baker from St James Place Wealth Management reminded me the other day - don’t forget to factor in the costs of goals such as University, Life Insurance and Critical Illness cover and potentially school fees. These all require thought, care and an awareness of “combined resources and combined stated, specific objectives. “
2) As a couple you need to work out a financial plan that works for both of you
✅ Treat your finances as joint income and joint expenses.
"A woman on maternity leave having no access to her own money without asking her partner "would be similar to if her partner came into the kitchen and had to ask permission to eat something,"
Source: Quartz at Work
❌ Don't be dismissive of your wife's income
"I said to her, ‘If you take your job and net out all of the day care expenses and net out all of the extra tax that we have to pay because you work, we’d fundamentally be making the same amount of money between us.’
Source: Harvard Business Review
❌ You shouldn’t treat childcare costs as just an issue for the Mum
"Oh and the point I would add to the bit about paying for childcare is that I think that so many people view childcare costs as coming out of the mum's salary, so feel it isn't worth it. Eg she earns £1.5k and the nanny costs £1.2k, so what's the point? In my view, you should combine both salaries, then deduct childcare costs- they are joint children and a joint expense and conceptually seeing this as coming solely out of the mum's I think is hugely undermining and demotivating."
👉 This is what you need to do
1. List your family priorities
2. Work out the financial impact for each priority
3. Will your priorities reduce or increase your family income?
4. How much money will need and when?
5. How will you fund it?
Save now for future? Use savings now? Borrowing? At what cost?
6. Review your current finances
Each month - what’s coming in, what’s going out and where is it going?
7. Talk about your finances with your partner
Are you Spenders, Savers, Risk takers, Security seekers? Who controls how money is used?
8. Design your future budget
Factor in your family priorities, what needs to change to allow those priorities to be supported
👉 By the end of the process
You’ll have reduced your stress by understanding where your money goes.
You’ll understand how much money you need to achieve the priorities.
You’ll know what changes you need to make to make it happen.