UnaVida | Spending: NOT on the Same Page?

Spending: NOT on the Same Page?

Spending: NOT on the Same Page?

Many inexperienced financial planners may assume that a couple’s attitudes to money are aligned. Invariably they are not, money issues are one of the biggest sources of marital strife and a leading factor in divorces. The financial disparity between a couple can lead to an increase in tension during financial planning meetings after opening the conversation on their spending habits, not only do some clients become very guarded in their responses, but often one of them has been spending their joint monies in a way that the other party was not aware of and disagrees with.

During one such meeting I was showing some clients their Income and Expenditure statements, and the lady present burst out laughing and said – “where did you get all of this ridiculous information from!” The answer, of course, was from them, and the husband confirmed all of the expenditure was correct.

Have an open and honest discussion.

Although the above was a quite hilarious example, this is a critical stage in the planning for both clients and the planner, it is very important that the clients and the planner agree the best way forward.

Without doing so, how can you possibly plan for the future?

Facilitating this dialogue is key to making sure that the clients agree on a strategy for their future planning.

Fun but Hopeless

Please do not think for a moment that this planning only applies to people on low incomes, who need to budget. We only deal with high-net-worth clients.

The couple mentioned above were on very high incomes, and they also had £80,000 of short-term debt, which we accepted was a priority for us to deal with them, it took 8 months of hard work. Finally, we confirmed to them that all the short-term debts of £80,000 had been cleared.

Naturally, they were overjoyed and celebrated by taking an expensive holiday to Jamaica.

When they returned they requested a meeting and explained that they had spent £50,000 on a timeshare and now wanted us to carry out further planning to get rid of that short-term debt!

As you might imagine the planning relationship with these fun but hopeless was terminated.

My Vocation

I was always destined for a career in financial planning, it is my vocation, and one of the many joys of the job that I do is to use my knowledge and skill to free up money for clients that enable them to realise a dream that they hold dear to them. To witness the joy on clients’ faces is a fabulous perk of this work, it gives me a buzz for days. There are so many instances over the years that have ensured that I keep doing what I do.

My advice is never to give up on your dreams, and work towards them by means of a jointly agreed financial and life plan. At the heart of all of this is an income and expenditure plan that will ensure that you achieve the best life possible with the money you have…

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