With any relationship we enter into, the key to making it a success is investing effort and giving it time to grow. When it comes to your money, the rules are no different. Just as you can learn how to love – and get better at it with practice – so is the case when it comes to your finances. You just need to be willing to put the work in.
Not sure how to go about it? We’ve come up with some top tips to help you build a strong and long-lasting relationship with your money this Valentine’s Day.
Take stock of where you are
Begin by taking stock of where you are right now. This means drawing up a detailed spreadsheet of how much you earn, how much you have in savings, how much you owe, and so on. Ask yourself if your monthly budget is realistic, or whether it needs adjusting to keep you on track with rising costs. If you’re finding it hard to get the balance right between bills, spending and saving, make use of resources such as the calculator tool at MoneyHelper, as well as one of the many budgeting apps now available.
Think about whether you have enough money put aside in savings and investments to afford the lifestyle you want both now and in the future. Look at whether you have a safety net to cover for the unexpected, enough slotted away to allow you to enjoy a comfortable retirement, and sufficient protection policies in place to provide for loved ones should anything happen to you.
Give your relationship some TLC
All relationships need work – and lots of attention – so get into the habit of regularly checking things such as your bank statement, the rates you’re earning on your savings, and how much you have in your pension.
While it’s also important to keep tabs on how any investments are doing, you need to resist the temptation to check too regularly. Do so, and you’re at risk of making poor decisions, as the market will dip, and your emotions might tell you to sell on the darker days. You need to remember that investing is all about playing the long game.
Make a date
Make a diary date to spend some time with your finances. You might say you’re too busy, but this stuff really matters. Schedule a regular time in your calendar to devote some attention to money matters. Aim for around an hour a month, or better still, an hour a fortnight – or even an hour a week. Having some one-on-one time with your savings, investments, pensions and insurance policies might not sound very sexy, but this is one relationship where it really is worth putting the time in.
Don’t give your finances the cold shoulder
As we all lead such busy lives, it’s easy to get distracted from the things which really matter. But you need to make money a priority, as if you ignore it – or give it the cold shoulder – that’s when things can go wrong.
Don’t, for example, just move a load of money into savings and then forget about it. You need to keep an eye on rates to ensure they remain competitive. Similarly, don’t set up pensions and then think this job is ‘done.’
You need to keep tabs on whether you’re on track to reach retirement goals. Start by checking your State Pension forecast (visit gov.uk/check-state-pension), and make sure you read the annual statements you receive from any workplace and personal pension providers.
Also check out online pension calculators that can help you decide if your current pension payments will be enough to fund your retirement lifestyle. You need to make money a priority. This is vital if you want to safeguard your financial future.
Be a little risky (risqué)
If you’ve never invested before, then why not seize the opportunity this Valentine’s Day to dip a toe into the market? The stock market may feel riskier than cash, but can deliver better returns if you stick with it. You may be nervous about volatility, but what you need to remind yourself is that while markets will go up and down, over the long term, investing has the potential to beat inflation.
Remember you can select investments which suit your risk appetite, and you can diversify across different sectors, countries and asset classes. You can also dip a toe into investing with as little as £10 or £20 a month to begin with.
Be honest
Facing up to financial problems can be hard to do, but when it comes to money matters, you can’t afford to bury your head in the sand.
If you’re saddled with debts, or know you’re not paying nearly enough into a pension, you need to be honest with yourself about this. Denial may be the comfort the brain offers, but it won’t do you any favours.If, say, you’re struggling with debts, don’t be afraid of asking for help. Useful organisations include the likes of National Debtline and Citizens Advice.
If you don’t know where to turn in terms of saving more for retirement, speak to your employer or, if you’re over 50, book a free Pension Wise appointment.
If you’ve got other money worries or questions – and especially if they are complicated queries – think about getting financial advice (if means allow). Head here to find out more about finding a financial adviser.
Equally, if this feels out of reach, consider consulting a financial coach who can help you decide the best way to reach your big savings and investing goals. This can be a valuable lower-cost alternative.
Be open
Many of us shy away from talking about money with family and friends, and lots of couples avoid talking about this taboo subject with each other. But there can be a lot of benefits to being open about our finances – especially with loved ones. So show yourself some love this Valentine’s Day by striking up some conversations about cash.
Think about the long term
You might be someone who doesn’t like thinking about the long term when you get into a relationship, but that’s something you can’t afford to do when it comes to your money. With investing, for example, you need to accept that you’re tying up your money for at least five years – and ideally a lot more. And when it comes to your finances more generally, you need to face facts that – like it or not – you’re going to be in this relationship for the rest of your life, so you might as well get used to that idea.
Plan your future together
With this in mind, you need to accept that there are going to be ups and downs along the way. That said, you need to remind yourself that with the right planning – and the right vehicles in place – you will make it through the tougher times. Unlike other relationships in your life, you can’t walk away from your finances. This is, after all, a lifetime commitment – so be sure to show it some love.
Photo by Rodion Kutsaiev on Unsplash
