- Australia's high cost of living could be impacting younger couples' relationships.
- Money.com.au commissioned a survey with over 1000 Australian respondents.
- Unexpected expenses (27%) and a lack of income (21%) had the most impact.
Recently released research has revealed that four in ten Aussies in a relationship have experienced financial stress in the last year, with close to half of these reporting a negative impact on their relationship because of the stress.
The findings are from a survey with 1010 Australian respondents, commissioned by the finance platform Money.com.au. From the pool of respondents, 662 were in a relationship.
Helen Baker, licensed financial adviser and Money.com.au spokesperson, said financial strain can create or exacerbate relationship problems.
“Money is one of the biggest contributing factors to relationship breakdowns.”
Helen Baker, Financial adviser
Ms Baker said, “Ultimately, money problems can prevent people from doing what they want and meeting goals, such as going on holidays or paying off debt. The resulting strain and resentment between couples can create or exacerbate other problems in a relationship.”
The cost of living in Australia is high with very little sign of slowing down.
The latest data from the ABS shows the inflation rate rising to 7.8 per cent in the 12 months to the December quarter of 2022, the highest movement since 1990. The higher cost of living not only has an impact on Australians’ bank accounts but also on their relationships.
Younger couples particularly impacted
While 41 per cent of respondents in a relationship report having been financially stressed in the last year, younger couples seem to be disproportionately affected.
More than half (57 per cent) of couples under 30 have been stressed over money, compared with just 25 per cent of over-50s couples.
A higher proportion of younger couples also admit their relationship has been negatively impacted by financial stress. A whopping 40 per cent of relationships in the under-30s demographic have been affected by financial strain, while just 25 per cent of over-50s have felt an impact.
Which financial stressors had the biggest negative impact?
Of a list of eight common financial stressors, respondents selected unexpected expenses (27 per cent) and a lack of income (21 per cent) as the most impactful on relationships.
“Commonly in relationships, one person is usually goal-oriented and focused on saving, while the other is the spender. Unfortunately, the survey results show that this dynamic may have left many couples unprepared for sudden expenses and concerned over bills and loan repayments,” Ms Baker said.
“Planning and budgeting can go a long way in reducing financial stress, and keeping couples on track and accountable,” she said.
Another financial stressor is overspending, which was identified by 16 per cent of respondents as the most impactful on their relationship. Stress over deadlines to pay bills, loan repayments or other expenses was the top factor impacting the relationships of 10 per cent of respondents.
Rounding out the list was the fear of not being able to pay for everyday expenses (nine per cent), not having enough to afford ‘big ticket’ items, such as holidays (eight per cent), having to talk about money (seven per cent), and the state of their bank account (three per cent).
Simple budgeting as a solution
Ms Baker says she recommends a basic, easy-to-follow budget to many of her clients, particularly for those that struggle to save, and set and follow goals: “I often advise couples to write down their income and what their money is spent on each month.”
“Then, in another document, such as a spreadsheet, map out the money they want to allocate to essentials and non-essentials, such as holidays and entertainment, and future planning, such as a deposit for a property or an emergency fund to buffer periods of high costs.”
“In this document, it is also important to consider three different areas: the minimum funds they would need to achieve their goals, a compromise number and the funds for the ‘perfect life’” she said.
“Rather than a one-size-fits-all approach to budgeting, the simple act of mapping out income and expenses visually, allows couples to see exactly what they have to work with and the changes needed to fulfil their goals.”
“Ultimately, this simple tool can help them establish healthy financial habits that can help minimise stress and tension in the relationship, and ensure that both partners equally build funds that can go towards future investments, holidays and retirement, not to mention reduce any shock and stress over unexpected expenses or higher-than-normal bills.”
