Money & Relationships – Tony Delroy Show Podcast

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Notes from Bernie’s conversation on Nightlife with Tony Delroy and Kerrie McFadden on ABC 702 Radio on Monday night 27 July 2015


In 2011 Relationships Australia found that financial issues were the single biggest cause of relationship breakdown (26%), followed closely by communication difficulties (25%). These results have been repeated year on year leading RA to develop the Managing Money Matters website (, a site which aims to show people a few simple strategies to develop practical, proactive financial planning skills and in the process build better relationships.  Tonight we are joined by Relationships Australia Brand and New Business Director, Kerrie McFadden and Psychotherapist and Mediator, Bernie Bolger, who joined forces in 2011 to bring the concept of the Managing Money Matters Website to life.


I know we have talked about money and relationships before, but I must admit, Relationships Australia is not the first organisation I would think of turning to if I were having financial issues? How did it come about that you collaborated with RA on this project?

 As you know Tony, I am passionate about all things financial within relationships – especially the emotional side of things.  But just like you I realised most people would not seek advice from a relationship counselling agency if they were having financial issues.  But what were the alternatives? Their financial planner, their accountant or even worse their lawyer? I’m not sure any of these professionals are equipped to deal with the emotions of the mortally ashamed wife who has maxed out the family credit card again or the battered ego of the husband who has been told he is no longer required at the company to which is has given 25 years of his working life and yet still has a half a million dollar mortgage and three kids in school.  Yes, they can deal with the mechanics of the problem but not with the emotional triggers which drive people to the edge in situations such as these. Sure, perhaps they could fix the problem, but not the drivers that caused the problem in the first place.

Equally, therapists and counsellors are not renowned for being the most pragmatic and practical of people, especially when it comes to cold, hard cash. So what to do and where to go was the million dollar question.

For a long time I have believed that if we can understand and acknowledge the emotions first, we can change behaviour, and it was through that framework that I realised Australia’s biggest Relationship counselling agency had to be the place to start.


How hard was it to convince RA to get into the world of finance and money?

Actually not that hard at all. At around the same time that Bernie was coming up with her own ideas in this area, RA had been looking at the results of their annual survey and had noticed that financial issues had been steadily creeping up the list of causes of relationship breakdown.  I think RA realised there was no point in carrying out these surveys and not doing anything about them and that was when the concept of the Managing Money Matters website was born. But we needed someone who understood both the emotional side and the practical side of money and so when Bernie was introduced to us, it seemed like a natural collaboration and a way forward.


What I notice about the Managing Money Matters Website is that it doesn’t just look at adults and the role of money in their relationships, it takes a much broader view of the issues? Tell me more about that…

As we went deeper into the whole idea of the role money plays in people’s lives and relationships, we realised the problems didn’t just start when people started living together, it actually started way before then.  The ideas we have about money actually come from our families of origin and even before that.  Unwritten rules are passed down through generations so that when we earn our first pay packet, how we deal with that money can be directly related to what we learnt growing up. Equally how we plan for and deal with retirement doesn’t just start at the age of 65. And it can have such profound effects on our relationships. Especially if your partner doesn’t share the same views and values as you.


So not only are you looking at the part money plays in relationships but also, as humans, our relationship with money as we go through life.  Tell me more about the different stages you have broken these down into?

With the work I do, either counselling couples through relationship difficulties or mediating as they separate, it has become increasingly obvious to me that a lot of people just have really bad habits around money. But where do this bad habits come from and is it possible that there are certain important points in a life span where money decisions can be influenced, leading to better outcomes both emotionally and financially?

The obvious place to start was with the first pay packet, look at how that was handled and then move through the big moments – Partnerships, Buying Real Estate, Family Life, Building Security, Retirement and finally Life’s Icebergs or Blind-sides which could happen at any time.   And the big take-home point is that the better the financial hygiene is at an early age, the less likely we are to end up with STDs (Sexually Transmitted Debt) later in life


So what you are saying is that before we even earn our first pay packet, we already have a relationship with money, through ideas and money messages that have come from our parents and grandparents

Absolutely. Money messages are learnt at home from an early age. Even if money is not talked about around the dinner table, that is a message in itself.  One of the most common things I heard growing up was that ‘Money doesn’t grow on trees’ or ‘Look after the pennies and the pounds will look after themselves.’ The problem today is that money is invisible and if we do not consciously talk about it how can we expect our kids to know how to deal with the myriad of deals on offer to them every day of their lives?  I mean just take a look at the example of going grocery shopping in today’s world. Through the eyes of a child not only do we not pay any money for the groceries at the supermarket, the girl on the check-out asks us if we want to take any money with the groceries!!  It could actually appear that we are being paid to take groceries out of the supermarket!  If we do not have overt conversations about money with our kids how can we expect them to avoid the three biggest financial pitfalls?

  1. The mobile phone bill
  2. The car
  3. ‘Buy now, pay later’ deals

It is so easy to run up hundreds of dollars of debt on a mobile phone bill if the right plan is not in place or if daddy is not there to pay it off. Just because a 22 year old is driving a fancy BMW does not mean they are actually rich and own the BMW. And finally the small print in the ‘Buy now, don’t pay for 24 months’ can easily end up in a 24% interest charge bill without the proper financial discipline. And all of these potential sources of STD’s can have follow on effects down the track on their relationship with Mr or Mrs Right.


Buying real estate – how can this impact relationships?  Surely this is a sign of commitment and the beginning of a joint journey?  How can this be a cause of concern?

This is a really interesting one.  Over the last few years I have begun to see how much pressure people put themselves under with their choice of home and the size of their mortgages. It’s like all common sense goes out the window.  I have one couple in mind who have a $900,000 mortgage and two young kids under five and they are miserable.  They are constantly tired.  There is no fun and no money to lubricate the pressure.  Practically all of their salary goes towards the mortgage.  Yes they might end up owning a more valuable property but that won’t compensate for the fact that the proceeds from the house sale will have to be split in two when (not if!) their relationship breaks down! So just like everything else in life, it is very important to make sure that the purchase of real estate is aligned with both partners’ values and the goals are achievable. And this is not just true for couples.  If you are buying a piece of real estate by yourself, life doesn’t have to end with the purchase. With the average house price in Sydney just topping the $1 million mark, make sure the repayments take into account the fact that you have to live, socialise and have some fun!  I mean where else are you going to find someone to share with, if you are stuck in every night on a diet of bread and water.  At the end of the day, a house or apartment is just a collection of bricks and mortar unless it is filled with people who make it a home.


Money and Partnerships – what are the pitfalls?

When two people get together, it is easy to get swept up in the romance of it all.  Dinners out in swish restaurants, flowers every second day accompanied by tender little love notes, expensive bottles of wine by the fire, holidays in far flung corners of the world. And so it goes on, until it doesn’t.  At the end of the day most of us live in a real world, where budgets have to be adhered to, bills have to be paid, careers have to be worked on. So who is going to be the kill-joy and bring up the subject of debt and more importantly how is it going to be brought into the conversation?  Not over the romantic dinner on the second date, hopefully!

But it is a must have conversation which a lot of people avoid.  A gentle way of introducing it is through a conversation about values and linking them to goals.  This can naturally progress into how goals can be funded and an ‘I’ll show you my bank account if you show me yours’ moment!  If it really is something you find hard to talk about, call in the help of an outside expert who can take the emotion out of it and get on with the business of planning and budgeting for the financial parts of your life goals. If financial independence is a key value, then don’t be afraid of suggesting that you want to keep your own bank account.  Sure there will be joint expenses but an agreed amount of individual discretionary money kept in a separate bank account is good for the ego and good for the relationship.


And then there were three! Or four! Or however many you would like.  What can parents do to prepare for the new emotional and financial circumstances that come with the addition of each child?

And this is where it is all about open communication and knowing your values and your partner’s values.  Assumptions are not enough, conversations must be had. Without apology and without embarrassment. The most important one will be who is going to look after the baby and what are the financial ramifications of that? If one parent is going to stay at home where is their discretionary money going to come from? This conversation needs to be had, before the sleepless nights and endless rounds of nappies and feeding arrive.  Because if you think it is hard to find ‘special’ time before the baby, it is nothing on how hard it will be afterwards. But five years on, when bad habits have crept in, and feelings of being taken for granted abound, you will surely regret not having had that conversation in the throes of baby anticipation joy.  One controversial way of dealing with it is a personal favourite of mine.  50% of the salary of the paid employee should be transferred into the bank account of the non-paid stay at home parent.  This is a real statement between two people that they believe each person’s role in the family is equal and should be remunerated equally.  Household bills and cost are then paid for equally by both parents without one having to ask the other for money or having to justify spending.  Of course this only works where both parents work from a mutually agreed budget.


And after the kids have left home – do all the financial and relationship pressures leave with them?

No this is where it is really important that you have worked on your relationship through the busy, cash strapped years and made sure you are still singing from the same song book. We live in a very child-centric world and it is easy to hide between work and kids and not deal with any relationship issues.  But suddenly they are gone and retirement is looming and you are looking across the dinner table and wondering who the hell is sitting across from you.  Just when time and money are potentially becoming more plentiful, how sad would it be to find that you really don’t have anything in common with your partner and the last thing you want to do is take off in a campervan or on a cruise with them for months at a time?  So it is absolutely key that you keep reviewing your values and your goals together.  Make sure you have agreed how much money needs to be set aside for retirement and work out a joint budget accordingly.  Continually check in with each other on the big ticket items – Are you going to downsize when the kids move out? Do you like urban or suburban living? How do you feel about committing to looking after the grandkids a few days a week? These issues might seem trivial but they can cause huge friction in relationships and it is best to sort the differences out ahead of time. Have conversations rather than make assumptions at every point of your relationship journey.  Always check in, respect points of difference and find ways of honouring both partner’s dreams.


Life has a horrible habit of throwing up curve balls and upsetting even the best laid plans.  What are some things we can do to hedge against these blind-sides so that our relationships or financial security don’t crumble?

Plan for the unexpected has been a motto of mine for a long time.  It is why I have always taken out insurance when I have gone on holidays or why I always take out comprehensive insurance on my car. And it is not that I am a pessimist – far from it.  It is because I have known from an early age that things don’t always go the way I had planned.  Now when we are younger, that might involve not getting picked for the A team in soccer or not get first place in an exam.  And frankly being able to deal with such disappointments emotionally when we are young, builds resilience.  However, bigger kids, bigger problems. And they normally involve money.  So how can we plan for this?  Boring and all as it may seem, insurance is one of the best ways to minimise risk.  Now of course it does not fix the sadness of learning that your child has a terminal illness or that your partner has lost her job. But at least it can help with the financial aspects of the blind-side, freeing up space and time to deal with the emotions.  So for a young newly employed person – take out trauma insurance – it doesn’t cost much to insure a young person and it’s a way of mitigating against the financial cost of an unexpected illness.  Once a person takes out a mortgage, it makes sense to take out life insurance which will at least pay off the mortgage should the unexpected happen.  What parent or partner wouldn’t want their partner or kids not to have to worry about losing the family home should their death come unexpectedly? Always try to have a bucket of at least three months wages in a high interest bank account to hedge against an unexpected job loss.  Life’s icebergs are bad enough emotionally so help yourself and plan for the financial aspects today.  If you don’t know what you need, talk to an expert who does.