Financial Vows


Financial Vows
We all remember the important part of our wedding vows – “for richer or poorer”.  But after the excitement of your special day, most newly weds leave their financial management to chance.  This can sometimes cause issues within a relationship as each person has different goals, dreams and attitudes towards money and what to do with it. It’s no coincidence that financial stress features as one of the main causes of divorce and newly weds should consider to develop their own financial vows.  It doesn’t sound very romantic but this five-step guide can save a lot of problems later on.

Step 1 Significance and Prioritise
Consider what is important to you and why.  You may want to save to buy a house, plan to have kids or travel overseas regularly because you love experiencing the different cultures.  You both may have different goals so it’s important to discuss these openly and prioritise these.  Once you’ve agreed on a list, write it down.  Place the list where it can be seen regularly to remind you of your financial vows and goals.

Step 2 Know where you spend your money
If you can’t measure it, you can’t manage it.  As dull as it may be, you need to look at your spending habits and work out if it is consistent with your priorities.  Keeping a budget for 3 months is a good exercise to make you aware of where you spend your money and how much.  However ongoing budgets can sometimes be unsustainable.  Limit what you spend by asking your employer to put a proportion of your income directly into a savings account so you don’t see it.

Step 3 Don’t eat your money
Most cash spending goes on food, coffees, lunches and entertainment so if you are wondering where that $50 from your wallet went – you probably ate it!  Be smart about your money, if you could save $50 a month and invest it at 7%, you would have over $8,650 in 10 years – enough to pay a year’s school fees or upgrade your car.

Step 4 Shop wisely
When you are spending money, think before you buy.  Shopping around does make a difference and with the help of the internet, it’s easy to find the best deals.  Priorities your spending and don’t fall into the trap of “keeping up with the Joneses”.  It is common that people buy things that they don’t need, with money they don’t have to impress people they don’t like so think before you buy!

Step 5 Keep talking
There is no point having a plan unless you make time to review it as it is likely that your priorities may change over time.  It is also a time to be honest if you have cheated on your financial vows.  Maintaining good communication is important but keep in mind a sense of humour is also recommended. Whilst it is important to establish financial vows when you are a newly wed, it is also appropriate for families and retirees to also have them.  If you are struggling with establishing your vows, consider seeing a financial planner to help out.  Having someone objective can sometimes help sort out indifferences and facilitate difficult conversations about money.

Olivia Maragna is the Co-founder of Woolloongabba based firm Aspire Retire Financial Services and has been recently named the Australian Adviser of the Year. She is providing finance advice as part of's Good Advice project. Olivia's advice is general in nature and readers should seek their own professional advice before making any financial decisions.

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