New financial year planning tips for couples and families

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Transcript

Announcer: We’re taking a moment out from the requests to talk to our finance expert, Helen Baker from On Your Own Two Feet.

It’s the end of tax year, Helen, and I don’t know about your household, but definitely in my household, we call the tax stuff and the finance stuff a “blue job” because I’ve got enough laundry, enough cooking, enough household stuff to do. But you’re telling me that actually everyone in the household needs to know what’s going on, is that right?

Helen: Yeah, I think it’s really wise that everybody in the household is working toward the same goal together and that everyone is on the same page with finances because one of the key issues that you see that causes divorce is actually the management of finances and the lack of understanding, as well as the pressures that bear on finances. Often you have one person in the family, the husband or the wife, taking care of certain chores or running kids to school, working, you’ve got two incomes in one household, but predominantly one person sort of tends to manage the money and the other person leaves it to them.

The issue happens, as has just happened even today, is this widowed client who doesn’t really have a handle on what is her financial situation now that her husband is gone, which is always quite daunting. But I think it’s really wise for even young people, as you’re growing together, to be on the same page with your finances, grow together, understand what’s happening, manage the money well together, make sure all your foundations are in place and I talk about those five foundations in the book that we’ve got on On Your Own Two Feet. That will just help everyone to be on the same page and heading in the same direction.

Announcer: Now would your advice be as a family, do a budget that everyone can see in a spreadsheet somewhere so everyone knows what’s coming, what’s going, and then you sort of get that goal at the end of it—“Oh look, we’ve got this much, maybe we can have a family vacation,” instead of, “Why do we have no money?” The other guy says, “You keep spending it all!”

Helen: Definitely. I actually tend not to call them budgets because I usually find that that means handcuffs and it means “I can’t do this” and “I can’t do that,” so I actually call them a spending and an investment plan because that’s what we should be doing. We’re going to spend. We have to buy groceries, we have to pay the electricity bill, we need to put petrol in the car, we do need to go on a holiday as a family together because that’s really important for everyone to be together for quality because we work hard, we need to have that time out physically, as well as bonding with our families. So we want to plan for that, and then nowadays we really need to plan for our future and put something away from an investment perspective.

Usually when I ask clients and I send them a little document that we have to create their cash flow, what they really think they spend versus what they’re spending is usually quite a surprise. But the good thing is, if we deal with reality and we know what’s going on, we can make a plan to go forward. If we think that we’re saving this money and we don’t, we kind of feel a little bit lost and frustrated and then we just give up. It’s a bit like a diet, if you go too hard and you make things too tight, then eventually you just have a big splurge and we’re like that with money as well.

Announcer: Oh, yes. Well, yes, I know that. My husband says, “You either think we’re on the poverty line or we’ve got all the money in the world – just make your mind up!”

Helen: Yes.

Announcer: Brilliant! Well, thanks very much, Helen, that’s definitely given me an insight. I’ll have to sit down with the hubby on the laptop and figure out not our budget, but our spending and investment plan. I’d love to get some top tips from you and talk about different things and maybe we can chat to you next week and see what the best way forward is.

Helen: Sounds fantastic, look forward to it!

Announcer: Take care, Helen.

Helen: Cheers! Bye.