Spouse Finances: The benefits of taking a joint approach

One of the clear benefits of taking a joint approach to family finances is that both spouses will gain a better understanding of how family money is managed and place themselves in a stronger position to reach their long-term goals. As a result, couples who take a co-ordinated approach are generally more confident about their financial future.

Yet a recently-published report by a Bloomberg’s news service in the US points to several comprehensive surveys reinforcing once again that many couples don’t seem to know anything about their partners’ retirement savings and how much their partner earns.

Particularly given the waves of Australian baby boomers already in retirement or nearing retirement – and their children reaching middle-age or beyond – the issue of joint personal financial management is well worth examining and possibly discussing with an adviser who can help facilitate the discussion in a “neutral” environment

The list of financial matters, including the state of their retirement savings, which couples might discuss with their spouses themselves (and with their advisers) seems almost endless.

Here are a few starters: Budgeting together; setting long-term shared goals; co-ordinating investment, savings and debt repayment strategies to reach those goals; and setting appropriate asset allocations and diversification for portfolios held jointly and by individual spouses.

Other topics worth discussing as a couple include how to minimise investment costs including investment management fees and taxation – again for portfolios held jointly and by individual spouses (as well as through any entities). The possibly different personal tax rates of individual spouses may be a consideration here regarding how to hold investments.

The Government’s plan to place a $1.6 million cap from July 2017 on the amount that can be transferred into super pension accounts or that can remain in pension accounts will encourage more couples to co-ordinate super savings. Undoubtedly, couples with larger super savings will consider whether to make their super balances as even as possible.

And the annual caps on individual concessional and non-concessional super contributions also provide a powerful incentive for couples to co-ordinate their retirement-savings efforts. (Members with super balances above $1.6 million will not be able to make more non-concessional contributions from July next year under the draft legislation.

Another standard topic for discussions about joint finances and investments should be whether the family holds sufficient life, disability, income-protection and health insurance for a family’s needs.

One of the clear benefits of taking a joint approach to family finances is that both spouses will gain a better understanding of how family money is managed which can result in less family stress and anxiety around money matters

Most of us would know of instances where one partner in a couple tends to dominate the family’s financial decisions. Often this is partly because the less-involved partner shows little interest.

Indeed, the tax office – as regulator of self-managed super – has warned of the possible consequences for an SMSF’s efficient management and compliance if the spouse who is more involved with the SMSF predeceases the less-involved spouse. This warning, of course, could extend to non-SMSF family finances.

Managing personal finances and investments as a couple should, ideally, go far beyond having a joint bank account. Both spouses should at least be pulling in the same direction when it comes to their finances. In our experience, couples who do this (perhaps with the assistance of an experienced adviser) are generally less anxious and more confident about their financial future.


This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax/or legal advice prior to acting on this information. Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product. The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the Oreana Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Gordon Thoms and David Conte of Calibre Private Wealth Advisers are Authorised Representatives of Oreana Financial Services Limited ABN 91 607 515 122, an Australian Financial Services Licensee, Registered office at Level 7, 484 St Kilda Road, Melbourne, VIC 3004. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.

Liked this article? Share it!