Achieve Your Dreams, the world’s pre-eminent site for supporting men and women who have suffered a relationship loss , and promoting better relationships presents another insight into assisting men and women to find better and more satisfying relationships.

This blog is intended for adults wanting to understand relationships and forge strong lasting relationships.

Attend our Facebook meeting – register https://www.facebook.com/events/434739934266825

There is an old saying that goes something like this, “When money troubles walk in the door, love flies out the window!” Money is probably the #1 topic of disagreements in families – or more precisely, lack of money, its allocation, where it’s spent, and debt, which can be crippling. Things aren’t much different in the business world – who gets what benefits, or in the corporate world – who gets paid what. Since we specialise in relationships, we are going to talk mostly about families, which encompass all family relationships.

So let’s start with financial literacy. Here is a good definition:

“Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgetting, and investing. The lack of these skills is called financial illiteracy.

KEY TAKEAWAYS

• Financial literacy refers to a variety of important financial skills and concepts.
• People who are financially literate are generally less vulnerable to financial fraud.
• A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business.” https://www.investopedia.com/terms/f/financial-literacy.asp

So now we have a working definition let’s see how we can recognise financial literacy in others. The easiest way is to watch another person’s spending habits. Do they live within their means? Do they spend indiscriminately? Do they consume rather than invest? What’s their belief about debt? Are they already in debt? Are they managing debt, or is it becoming a problem? Most people will give you clues – what type of car do they drive, how do they dress, what sort of lifestyle do they live and how much do they earn. If they spend more than they earn there is a big chance they are using debt to fund the difference.

“Love is Blind,” so they say and it often is. Many feel strong emotions, the brain is flooded with strong chemicals (Mother Nature’s way to propagate the species) and we don’t want to lose our chance at love. Granted! But, before you make a long term commitment a frank and honest conversation must take place about money and debt and the position the parties are presently in. If the other person won’t have that conversation – run, as fast as you can. Don’t agree to be part of a loan for expensive luxury items – cars, boats, holidays, rental bonds on luxury apartments or houses – you may become responsible for the balance of the loan if your partner does a runner.

If you agree to cohabitate ensure you have a firm agreement on money strategies. How the bills are divided, personal spending money, medium and long term goals, future investments (income producing assets only – not your own property), future incomes, including having children, and anything else important to both of you. If your partner has a large debt, servicing that debt will come into the calculation of how much you can borrow to invest or buy your own home.

Attend our Facebook meeting – register https://www.facebook.com/events/434739934266825

Also important is your views on money. People fall into 2 broad categories – investors or consumers – the wealthy tend to invest and the poor tend toward consumption. If you are an investor and your partner is a consumer both are likely to be frustrated, likewise if both are consumers they is a possibility of uncontrollable debt, and if you are both investors you may have to delay your gratification until you can afford what you want. There is a great book called Rich Dad Poor Dad by Robert Kiyosaki that may be of assistance – many libraries would have this book and it may be available at used book stores as well as online.

There is ‘good’ and ‘bad’ debt. Good debt is used to purchase income producing assets – investments that add to your income. Credit card debt used to maintain your consumption is an example of bad debt, others are ‘pay day debt’, so called interest free debt to buy furnishings – many people can’t make the instalments and are charged huge amounts of interest, and ‘after pay’ (usually pay in 4 instalments) – to pay for consumer items. This is reasonably new and very lucrative for the providers and the merchants.

If you find you can’t pay a bill on time call the provider immediately and be truthful – explain the circumstances and ask for their cooperation – most will have a policy in place. Do not use ‘Pay day’ lenders, or other short term, high interest loans no matter what the temptation.

If you are in debt you must first take responsibility for the debt and make a plan to get out of debt ASAP. You may be able to get a second job, make other income or reduce your expenses. Start with the lowest debt and pay it off, each time you do you will have more available funds to repay the other loans. Get advice and assistance – many people assist in this area. Do not get a ‘consolidating’ loan to pay off your previous debts. Strangely more debt doesn’t fix the problem – it makes it worse. Most are expensive and include a fee for the person arranging the loan. In some cases you may be committing an act of bankruptcy in Australia.

Bankruptcy can have serious mid term implications – get good advice before you make the final decision.

Attend our Facebook meeting – register https://www.facebook.com/events/434739934266825

So this is what we covered in this blog

1. Financial literacy
2. Watch spending habits
3. Have the conversation
4. Agree on money strategies
5. Consumer vs investor – Rich Dad Poor Dad Robert Kiyosaki 
6. Good and bad debt – investing
7. If you are in debt – make a plan
8. Get assistance
9. Don’t borrow to pay debt
10. Take bankruptcy seriously

Good luck.