Talking about money for couples

One in three people say that support when talking to their partner about debt and finances would benefit them.

A recent poll found that UK adults are hiding a collective £69.6bn of secret debt from their partners. Accounting for most of the debt, 5.5m people were hiding an average of £2,000 on credit cards.

Nearly 2/3 of married couples said that they would prefer to talk politics than money.

Sharing your attitudes to money

“A conversation about your finances can be awkward and if you’ve got debt even somewhat distressing” says Jane Morgan, from Direct Line, which carried out the research. “But it’s important to ensure your partner is aware of your financial position. Having these discussions as early as possible to make sure you are prepared.”

Using these questions can help you understand you and your partner’s attitudes to money. Talking about your goals, it’s important to think about what you both want:

  • Do you prefer to live for today?
  • Are you confident in managing money?
  • Do you think it’s important to keep track of income and expenditure?
  • Do you like to shop around to make money go further or to buy on impulse?
  • Are you open to discussing money?
  • Do you feel it’s important to adjust non-essentials when life changes?
  • Do you ask for help with your money?

 

There’s more useful information to help you talk to your parner about money from the Money Advice Service.

Get budgeting

Drawing up a budget is a great way to be open about your money and debts.

A great place to start is with this calculator from the Money Advice Service:

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Budget Planner

If you found this article helpful, you can sign up for money tips here:

 

Young adults: talking about money

A poll of 1,000 18-25-year-olds found money worries were widespread. Young adults are spending a large chunk of their time  feeling anxious or under pressure.

Young adults wanted to budget. They need more information about savings accounts.

Here’s a video of 16 to 25 year olds sharing their thoughts about money:

Budgeting tips

In October we published budgeting tips using the 50/30/20 rule.

Recapping, 50% of your budget should pay for your needs – the kind of things you can’t do without. Like rent, bills, food and transport. 30% of your money should go towards ‘wants’. This is non-essential shopping like sweets, holidays and outings. The remaining 20% is for plans, especially saving.

We’ve produced an infographic to help you budget better. It can also be downloaded here

Before you start, the Money Advice Service has information about rent, running a bank account and how you are taxed when your start a job.

Your budget should allow you some spare money to start saving. The Money Advice Service has produced a useful guide to savings accounts, including opening one with your credit union.

Why not kick off now? Here’s a budget planner to get you started:

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Budget Planner

If you found this article helpful, you can sign up for money tips here:

Talking to children about money

Teaching young children about money makes them better-off in the long-run.

A research project running since the 1970s found kids who were taught about saving were more likely to have a decent pension in later life. Budgeting skills meant less debt. Awareness of real-life costs makes people shop around.

For the under 5s

You can improve the financial knowledge of a child by involving them with financial decisions as soon as possible.

In the supermarket and need to buy ketchup? Ask a child to help choose, based on your budget and the price of the different brands. You could also allow them a set amount of money to pick something from the shop. Be clear that ‘when it’s gone it’s gone’. Talk about the choice they made and what they might do differently next time.

Here’s a video with some real-life examples:

Children in this age group can also learn to recognise different coins. Notes are worth more than pennies. Money should be kept safe.

For the under 10s

With some maths under their belts, kids can now learn the correct value of coins and notes.

You can show children that some things cost more than others. Toys. Buses. Chocolate. They vary in cost. They all have different benefits. What’s the advantage of spending on certain things over others? If you spend all your money on toys and have nothing left for the bus, what are the consequences? A long walk home in the rain?

This is probably the age when your children might think about a bigger purchase. As a result, they may develop savings goals. A toy or football kit might be out of reach today. But saving small bits of pocket and birthday money can help them reach their goal. How long will it take to have enough money? What are the consequences of temptation and an early spend on something else?

If the youngster doesn’t have a savings account, why not open a Junior savings account with the Credit Union?

Teenagers

If older children have started earning pocket money, can they keep track of their hard-earned cash? A recent survey found only half of 15-17-year olds who receive money keep track of their income and spending.

Teenage years are a great opportunity to teach the difference between wants and needs. Our earlier post about the 50/30/20 rule will help. To recap. 50% of your budget should pay for your needs – the kind of things you can’t do without. Like rent, bills, food and transport. 30% of your money should go towards ‘wants’. This is non-essential shopping  like sweets, holidays and outings. The remaining 20% is for plans, especially saving.

It is a good time to build on what they know about real life costs. If they dream of owning a car, explain the cost of MOTs, insurance and general maintenance. Could they budget for a week’s worth of food without overspending?

Part of teaching your teenagers how to manage their finances comes down to being strict with the money you give them. Not bailing them out if they overspend.

Here’s a video produced by teenagers kicking off a conversation about money with their peers:

But what about the parents or guardians?

Martin Lewis has produced 55 tips to save money if you’ve got kids.

We hope you found this information useful. You can sign up for more money tips here:

Talk Money Week

Central Liverpool Credit Union  is pleased to announce our involvement in this year’s Talk Money Week.

Launching today, Talk Money Week celebrates the work thousands of organisations are doing to improve money management across the U K.

What’s coming up?

Every day this week we will be providing money tips for members of all ages:

  • Tuesday: Talking to children about money
  • Wednesday: Young adults and money
  • Thursday: Working with your partner to meet money goals
  • Friday: Thinking about money as an older person

We will be send a summary by email on Friday. You can sign up to receive money tips directly into your inbox:

Next week we’ll be showing the benefit our services bring to employees. If you are an employer you can join our payroll deduction scheme.

The financial capability challenge

Unfortunately, levels of financial capability across the UK remain stubbornly low. Millions of people lack the financial resilience to deal with unexpected financial shocks.

Deadline to Breadline is a research project by Legal & General. It calculated the number of days households could survive on their savings if income was lost for example due to redundancy, long-term sickness, critical illness or death.

The average household had enough money to last them 19 days. Tenants in private rented accomodation had enough to keep them going for just 2 days. Social tenants fair worst of all. They could barely get by for 24 hours.

Talk Money Week provides an important opportunity to discuss life events. How collectively, we can support people at risk from uncontrolled levels of debt or suffering from other financial difficulties.

We’ve been helping for three decades

Next year Central Liverpool Credit Union will be 30 years old.

Since 1989 a lot has changed. How we manage our finances and, in many respects, the world, is unrecognisable from 30 years ago. No smartphones, internet, online banking or price comparison websites. Payday lenders didn’t exist. Nor did the Bedroom Tax and Universal Credit.

But some things remain the same.

When we first started, many of our members struggled to manage their finances. Not knowing how to manage a budget or plan for the future.

Many of the children and grandchildren of our first members still struggle.  The statistics highlighted below provide some indication of the extent of the problem.

We hope you find this week’s money tips useful. You can sign up even if you are not a member of the Credit Union.