Like most things, your finances do an about-turn when you become a parent.
- What you gain from following the Barefoot Investor program
- Easy money! 6 bill-busting tips for new families from a financial advisor
- How to make smart choices when it comes to money and kids
“Giving up control makes you incredibly vulnerable”
It might not sound romantic, but no matter how happy your relationship is right now, maintaining a level of control and understanding of your financial position is an effective insurance policy.
Georgina Dent is a finance journalist who is passionate about empowering women. She says that life has a way of throwing curve balls at you that unfortunately come with financial consequences.
“The happiest of marriages break down, accidents happen, people get sick, outside factors can impact that. Your financial situation will directly impact the quality of your life at any given moment. Giving up control makes you incredibly vulnerable,” says Georgina.
Listen to Georgina Dent on Feed Play Love:
What does financial abuse look like?
Vulnerability is also key to the darker side of family finances – with financial abuse being one of the more insidious forms of domestic violence because it’s near impossible to spot from the outside, looking in.
MORE Work and Finance
“Domestic violence is predicated on control – things like a partner needs to know where you are and who you are talking to. Every transaction is watched and you’re forced to account for what is happening,” says Georgina.
“In some cases, women are given a really small allowance to cover their household expenses – so they have all the responsibility to make everything run smoothly, but not enough money to make things happen.”
This can happen in both high and low-income households, making it very hard to leave.
“When one partner tries to leave, that is the most dangerous time in any violent relationship. But leaving a relationship without financial independence can make it harder and more dangerous to leave,” says Georgina.
Getting more involved in your finances is the best way to protect yourself.
Georgina says if you don’t currently have a credit card or pay any bills, it’s time to get serious about looking for ways to be more involved.
“Next steps here really depend on your relationship. If you are in a position where you have fallen into a habit [of turning a blind eye to your finances], tell your partner that you want to be more involved.”
Build a nest egg
The next step is to generate some form of income.
“Even if you have to look for little things around the house – the stuff you have that you don’t use that you could sell. Whatever it is, build yourself a modest little nest egg. It’s a start.”
For women who are already working, making extra contributions to your superannuation is one of the best things you can do.
“Women have to work on average around 25 years more than men to have the same amount of superannuation at retirement,” says Georgina.
“It can be daunting, so the best thing is to get a handle on it and then look at how you make changes to fix it.”
Cut down on living expenses
As Georgina says, burying your head in the sand isn’t the smart approach to finances.
If you know you need to tighten up your finances, then stop wasting time.
“Have your own account. Put it in your own name and put aside money just for you, every single month. This can just be for the unknown, but you will get great comfort knowing that you have a little buffer,” says Georgina.
“Then scrutinise where you are spending your money and look at where you can cut down on expenses.”
Finally, be aware of your financial position, it’s the best possible insurance against anything.