Joseph Trimarchi and Associates

03/03/2022

Financial Intimacy in Relationships: Benefits & Risks

Let's set an early-life scene: you've just started dating someone new, and you're excited about them. You've got a big date night planned, and you're ready to get intimate. You light some candles, and you both open up a spreadsheet.

We're talking about financial intimacy. It may not sound very romantic, but authentic and transparent conversations around money can stir up deep feelings and strengthen your connection as a couple. Working together, stopping the cycle of sabotage, complementing each other's weaknesses, and capitalising on strengths are all amazing benefits of relationships as a couple-hood that can be yours.

This guide is not meant to be theory only. Your “Financial Intimacy in Relationships” starts here.

The Benefits Of Financial Discussion

What types of money conversations you need to have with your partner depends largely on where you’re at in the relationship.

Here’s a rough outline of some important topics to cover depending on the stage of your relationship that will help you to focus where you need the most helpful throughout the benefits financial discussion guide.

Discuss new topics you've yet to broach as a couple, use the list above as a rough guideline.

Discuss money maintenance issues, this can include things like updates to categories like the monthly expenses, savings goal, debt payoff goal, etc.

Objective Bonus, build intimacy through a fun experience. The bonus part? Well, that’s where you’re going to build both your financial and emotional intimacy in your marriage.

Open And Honest Communications

Financial intimacy requires an in-depth understanding of your unique financial circumstances as a couple. It is impossible without one relationship pillar, communication. Initiating open lines of communication early on in your relationship can help build a strong foundation of trust for the future, but it’s never too late.

The more you know, the more prepared you are in relationships to handle any challenges or changes that can come down the line. Discuss your assets, expenses, financial goals, and wealth-building strategies. Be aware of who has access to certain records, accounts, and financial documents in the relationships, and whether that access is equal. By doing so, even if you ended up divorcing your spouse, you are less likely to feel blindsided by the financial implications.

Rethink Marital Agreements

In today’s complex world, entering into a legal agreement before or during a marriage is viewed much differently than it was in the past. The term “prenuptial agreement” (prenup) is no longer a dirty word with a one-sided connotation. A prenup is a partnership agreement that functions just as it would in a business relationship.

When both partners bring a lot to the table, which is the case for many modern couples, a smartly prepared prenup can be to everyone’s benefit. Postnuptial agreements (postnups) are another option for married couples whose financial situations have changed since they wed. A postnup can account for unpredictable circumstances within a family business or major liquidity event—things that may have not been considered before the marriage began.

Lean on Your Whole Team, Not Just Your Partner

Just like you would with a successful business partnership, assemble and listen to your team of trusted advisors. Well-chosen representation can ensure that both spouses experience the benefits of financial intimacy, no matter at what stage the relationship is in. Preparation and proficiency are the keys to getting what you need, and the best advisors excel in both.

Developing your financial intimacy may not sound very romantic, but the results could surprise you. Authentic and transparent conversations around a topic as private as money can stir up deep feelings and strengthen your connection as a couple.

Risks Management

After you start talking financial discussion in at least a semi-comfortable manner with your partner, it’s time to figure out the foundation to risks management to your couple's financial system.

Combined Finances - You’ll have a joint checking account, joint savings account(s), plus a way for each person to spend/access these accounts.

Separate Finances - Two separate checking accounts, two separate savings account(s), set up expectations of who will pay what bills. Let’s be real for a second here though – you cannot keep your finances completely separate from one another if you’re living together, engaged, or married. Even if you keep everything physically separated, your financial life is now somewhat tied to this person, even if just this person’s ability to hold a job and pay their share of the rent. Keep this in mind!

Hybrid Combined + Separate Finances - This looks like some combination of joint/separate checking accounts, and joint/separate savings accounts, with each person, having equal access to the joint accounts.

Along with actual money talks with your partner, reading through your options should help you figure out should be married couples have joint bank accounts, or should married couples have separate bank accounts.

Counsellors can take couples through an exercise where they individually fill out whether they’re the Maverick or the Goose on 10 different money roles, and then they compare answers.

After that, they need to hash out who will take the lead for each role be the Maverick and who will be the wingman, Goose. Even if you’re the wingman? You need to at least be kept updated about a role. No “head-in-the-sand” partners here.

Money Roles You Need to Cover Include:

- Bill Payment Overseer
- Office Manager (filing/organising financial life)
- Manual Bill Payer
- Financial Juggler (for when money needs to get moved to cover the unexpected or mishaps)
- Tax Prep
- Insurance Price Comparison Shopper
- Investment Overseer (the person in charge of investments)
- Savings Goal(s) Tracker
- Spending Tracker

Remember, take advantage of one of the best perks with couples' finances: choose the person most capable of completing each task. You want efficiency wherever you can.

Equality

You and your partner should have equal say and equal power in financial decisions. Often seek therapy when there is an imbalance in the relationship sometimes a partner who makes more money believes they should have more say in decisions. Other times, the person who is more anxious or frugal about money gets more say.

If this imbalance isn't equalised, both couples can end up with hurt feelings. It can bring up a lot of feelings, sometimes inadequacy, sometimes resentment, sometimes a lot of feelings about dependence. If we treat these feelings as, you know, they're all welcome, they're all valid. They're all something that we can acknowledge and process. This is how talking about money can help us grow closer emotionally.

Inclusivity

The old "my partner handles the money because they're better at math" won't work here. Both partners should be active participants in financial decisions. No one has sole control. No one gets to opt-out.

Neither of those works in the long term, because what it does is it kind of sticks the one partner in some ways, even if they're asking for it with all of the risks if something goes wrong.

Money mistakes happen, and if one person is solely in charge, there's too much room for blame and resentment instead of connection.

Transparency

Information around finances should be shared openly. This doesn't mean you have to merge all your assets or pore over each other's credit card statements.

We can still have areas of negotiated privacy. We can still say, you know, we both agree to put this much money into the joint account. We agree that these are joint expenses. And then this is the amount that we have leftover for making our personal decisions.

Access to information serves as a safety measure, so everyone knows what financial decisions are being made.

Sustainability

The financial plan that you and your partner come up with must be something you both can stick to long term.

For example, a couple who had that high need for control and safety with money, and the couple had some debts, and they wanted to just put every resource that they could toward paying down the debt. That made sense when it came to the math, but then the other partner felt like this plan had taken all of the joy out of their life.

That's not sustainable because it builds resentment. In a worst-case scenario, an unsustainable plan will cause one partner to act out. They will do things in secret, often running up debts. This kind of activity, as you can imagine, is destructive in relationships. Both partners need to compromise to come up with a sustainable plan.

Flexibility

Whether you've been promoted or lost your job or are starting a family or a business life changes, and so do our financial situations. If the financial plan isn't working or your situation changes, be open to change.

Sometimes we see a couple struggling to find their financial footing after a big life event. There was a couple that was eight months pregnant, and they had kept everything separate. For them, it was a point of pride and independence. But now they were running into a situation where that arrangement just wasn't sufficient. And the way that I asked about it was to say, like, who does the baby belong to, financially?

The absurdity of that question helped the couple see that their financial plan needed to be altered to accommodate their needs as a growing family.

Finance As Form Of Romance

The path to finding financial intimacy in relationships starts with creating a new financial blueprint. Whether you're in a brand new shiny relationship or you are just moving in together or have been married for years, this process offers numerous benefits at any stage of the relationship.

Take some time to sit down with your partner and talk through your feelings about money. That vulnerability is a really important part of intimacy. The messiness, the part that we're still figuring out, like when we can share that with another person? That's really where that magic connection happens.

No matter your background or money type, a healthy relationship is possible for everyone. You just have to start the conversation and really, what could be more romantic than planning for your future together.

Once you know the meaning and values each partner assigns to money, it’s easier to figure out a joint version of what you want and what money messages you want to pass down to your children. That knowledge enables you to be more compassionate and understanding, which means less fighting and more productive money conversations.

18/02/2022

Is Your Credit Rating The Western Version of China’s Social Credit System?

China China, massing might,
In the minds of the right;
What immoral hand or lie,
Could frame thy fearful mystery?

With apologies to William Blake, the China tiger looms large in the imaginations of Australians and fear of the "yellow peril" is once again being fanned by conservative politicians hellbent on dog whistling up an election victory. The China card is being played to instil fear of undue influence by a totalitarian regime upon our democratic system. However, does capitalism already control your behaviour via its own regime of fiscal checks and restraints? Is your credit rating the western version of China’s social credit system?

The Credit Rating File Vs The Social Credit System in China

Did you know that Australia currently ranks 11th in the least risky nations on a global finance safety index? This is according to Global Finance magazine and was published in July 2021. Reputation matters in the world of finance and lending. Sovereign credit ratings for nations are an integral part of global trade in the modern era. Corporate credit ratings define the financial health of companies around the globe. These ratings are assigned by credit rating agencies like Moody’s, Fitch Ratings, and Standard & Poor’s. Corporations and financial products are given letter based grades like A, B, and C, which are further qualified into AAA ratings or BB ratings etc. The credit rating system was established a hundred and sixty something years ago in 1857 by Bradstreet in the USA. Some experts say it is the most important financial metric ever invented. Individuals and businesses have credit rating files, which determine their financial fitness to borrow money and establish lines of credit.

“The Chinese social credit system involves all aspects of an individual’s life.”

China’s social credit emerged in 2014, as an opt-in system. There are, however, private, and corporate versions in addition to the government run one. These highlight shopping habits and, also, list friendships. The official Chinese social credit system involves all aspects of an individual’s life. All transgressions are listed on the file, and these can negatively impact on a citizens ability to book travel tickets and the like. Imagine things like parking fines going on your record and affecting your access to services. The linking of businesses to the system allows for their services to be withheld from individuals with bad scores. This reward and punishment scheme means that the Chinese government can employ coercive measures to control its citizens’ behaviour. The system quantifies civic actions on a much broader scale than our free enterprise capitalist credit rating score. In the west, we rate and determine access to the funds necessary to purchase freedoms - you need the money to buy a ticket to ride. Many in Australia find the Chinese system abhorrent, a gross invasion of privacy, and intrusive state control. However, our bad behaviour in a financial sense is, also, listed on our credit rating file, and determines our ability to borrow funds for things like purchasing a home or car. Is your credit rating the western version of China’s social credit system? Yes is the short answer, but it will be enhanced over the coming years to take advantage of the technological devices and available data now all around us. Get ready for far greater levels of government intrusion into your private life and financial transactions. The Australian Tax Office (ATO) already has access to bank accounts, investment portfolios, superannuation funds, and ABN related revenue, among its ever increasing reach into the lives of Australians.

How is Your Credit Rating Calculated?

“your credit rating is determined by a computer.”

In Australia, your credit rating or score is based on the data contained within your credit file. Usually, it is defined by a number between 0 and 1,000 or 1,200. The higher the number, generally, the better your credit rating is adjudged. This number will, then, determine whether financial institutions will lend you money, how much, and at what interest rate. An algorithm is utilised to calculate your credit score. We are hearing that term, ‘algorithm,’ a lot lately, especially in relation to the digital age. An algorithm is a set of rules followed by a computer, most often, in the calculation process. Yes, your credit rating is determined by a computer, in part, under the guidelines established by those who set up the algorithm. The information contained in your credit report file will establish whether there are high-risk indicators present. These may be credit infringements, defaults, bankruptcies, and/or court judgements which will all negatively influence your credit rating score. Obviously, a track-record of consistent on-time repayments will impact positively upon your credit rating. In addition, the type of credit providers will, also, colour the overall risk assessment evaluation. There are three different national credit reporting bodies operating in Australia, which include Experian, Equifax Australia, and Illion.

Analysing Your Credit Profile

There are a number of other factors, which contribute to your credit rating, and these determine your credit profile. How substantial is your credit history? The age and length of your credit history will impose further risk assessments upon applications for loans. A short or non-existent credit history provides little reliable data for determinations to be made upon. Things like the duration of your employment, your age, and the length of time you have resided at your address can provide additional supporting evidence for risk assessments. Previous credit applications are another factor considered in determining your credit score. Large amounts of credit enquiries are, generally, not considered favourable. Different types of credit applied for are evaluated on a scale of different types of risk. More recent credit enquiries are more influential in affecting credit scores than older credit enquiries from the past.

Comprehensive Credit Reporting

The historical origins of credit reporting has looked primarily for the bad stuff in your file. This can be understood if you put yourself in the shoes of the lender. Who wants to risk losing their funds in the hands of a spendthrift or shonky character? In our more enlightened times, we have a new system called Comprehensive Credit Reporting (CCR). This novel system requires lenders to provide more data about your credit history in the hope that this will ensure a fairer and more accurate picture of you and your credit record. A wider net is cast to capture more information upon which to base evaluations of credit risk. CCR encourages a greater focus on positive data like consistently good repayment histories.

You Can Repair Your Credit Rating

Unlike in China, you can repair your credit rating if you find an error in your credit profile and/or score. You will not have to pay a member of the politburo or provide favours of some kind, rather, you have the right to have mistakes on your file fixed. If there are errors regarding your personal details and debts in your file you can contact the credit reporting agency to fix them. Or you can pay a credit repair company to do this. If a credit provider has reported incorrect information about your credit history to the credit reporting agency you can take steps to have this corrected on your credit file. There is an old saying, “the devil is in the detail.” The details in your credit rating file are very important in the determination of your credit score and ability to access credit in the future. If you find errors around things like overdue timings and amounts re-unpaid debts, disputed defaults not recorded, unrecorded payment plans, and or identity theft debts, then, you need to contact the credit provider to remove the incorrect listings in liaison with the credit reporting agency. If you have problems in this regard you can engage an experienced lawyer who specialises in Credit Reporting Law on a no win no fee basis. You cannot, however, have removed from your credit file any information which is correct and true.

“Your devices are busily recording everything you write, say, and send”

Most social commentators, who are not in the grip of China-phobia, see the social credit system in China as a forerunner of what is to come everywhere via the digital age. Computers are, primarily, digital recording devices, they are not, merely, fun things designed to play games on and to use for communication. Human beings around the world have brought these devices into their homes and workplaces in the high-tech fever, which has gripped the globe. Smart phones, tablets, PCs, laptops, and the myriad of networked devices are busily recording everything you write, say, and send.

The Covid-19 pandemic has seen governments employ monitoring applications and programs under emergency health orders to control the behaviour of their citizens in a bid to combat the spread of the virus. Libertarians in the west are marching in protest against vaccine mandates and these intrusive state controls. China’s totalitarian regime is only a stone’s throw away from lockdown measures employed by states in Australia in the powers accorded to governments. The pandemic has pitted the rights of the state against the rights of the individual. You cannot have everyone doing their own thing when a pandemic is raging around them killing the old and vulnerable. Community values must gazump the rights of the individual citizen in this instance. Digital technology makes monitoring and, ultimately, controlling the behaviour of millions of people a much easier task for governments. Surveillance of citizens by security agencies via telecommunication technology has been going on for years in Australia and around the globe. Is your credit rating the western version of China’s social credit system? Affirmative, and it is only going to get worse in terms of loss of privacy and intrusive state control. Think of the changes made to laws governing security agencies in the wake of 9/11 and the ongoing war against terrorism. Statistically, relatively few people have been victims of terrorism, but we have spent some $8 trillion on combatting it, and the loss of freedoms in the west and elsewhere have been huge over the last twenty years, according to the Costs of War project at Brown University. In comparison, there have been 927,000 deaths from Covid-19 in the USA (New York Times, 16th Feb 2022).

“If you’re not paranoid, you’re crazy.”

Societal control via monitoring citizens through technological means has been underway for a long time. Your credit rating is only the most well established bastion of coercion and control in the west. Social media platforms are, also, routinely monitored by security agencies and both current and prospective employers. All the networked devices you have on and around you like smart watches, phones, security cameras, and computers are sharing up-to-the-minute information about your every movement and communication. If you want to wake up to the facts of 21C life don’t focus on China, rather, take a darn good look at what is happening in your own life in the here and now. The devil is in all those technological details. The good news is that you can repair your credit file if there are valid errors contained within it. Help can be at hand if required in the form of an experienced lawyer well versed in credit reporting law.

References

A Brief History of Credit Rating Agencies, Investopedia, 2022, https://www.investopedia.com/articles/bonds/09/history-credit-rating-agencies.asp
A Brief History of the Credit Score, https://www.marketplace.org/2014/04/22/brief-history-credit-score/
Australian Credit Score Explained, https://www.societyone.com.au/guide/credit-score
Costs of War project, Watson Institute, Brown University, https://www.brown.edu/news/2021-09-01/costsofwar
Covid-19 Deaths in USA, New York Times & Our Word Data, 16th Feb 2022.
Credit Scores and Credit Reports, https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports
Good Scores and Ratings, https://www.creditsmart.org.au/know-your-credit-score/what-is-a-good-credit-score/
If You’re Not Paranoid, You’re Crazy, https://www.theatlantic.com/magazine/archive/2015/11/if-youre-not-paranoid-youre-crazy/407833/
The Complicated Truth About China’s Social Credit System, https://www.wired.co.uk/article/china-social-credit-system-explained
The Tyger, William Blake, https://www.poetryfoundation.org/poems/43687/the-tyger
Our World Data, https://ourworldindata.org/explorers/coronavirus-data-explorer
We’re Just Data: Exploring China’s social credit system in relation to digital platform ratings cultures in westernised democracies, Wong, K.L.X. and Dobson, A.S. 2019. Global Media and China. 4 (2): pp. 220-232.
World’s Safest Countries 2021, Global Finances Magazine, https://www.gfmag.com/global-data/non-economic-data/safest-countries-world

21/11/2018

NO UPFRONT FEE CREDIT REPAIR GUARANTEED!

07/08/2017