Justine Shows Us How You Can Afford Your Husband:

This month we interview Justine Davies. Justine is a member of The Financial Planning Association of Australia with over a decade of experience as a financial planner. She is a freelance journalist who contributes to parenting publications and also has a finance blog on news.com.au. She is the author of How to Afford a Baby published by ABC books in 2007. She has also written the book How to Afford a Husband or any Other Live-in Lover.

Justine you wrote the book How to Afford a Husband or any Other Live-in Lover. Where did your inspiration come from for this book?
Well, my first book was How to Afford a Baby, which I wrote when I was pregnant with our second child. So it was based partly on personal experience, partly on my years as a financial planner. Anyway, after that one was published I was thinking about what my next book should be; my husband suggested that I had plenty of experience as a long-suffering wife - hence 'How to Afford a Husband' was born!

You make couples aware that they are two different personalities and their views on money might be very different. How important is it for couples to understand this? And why is it so important?
It's a well-known cliché — and very often true — that opposites attract. So early birds pair up with night owls, people who love spicy food have partners who eat nothing but pasta and rice. Also, spenders tend to pair up with savers. It's not a bad thing —two spenders mean budgetary disaster, while two savers can become a bit miserly.

However it's very important that couples understand these potential differences. A Relationships Australia report (Relationship Indicators Survey) found that money is one of the top three causes of relationship conflict. Forty percent of respondents said that disagreements about money cause significant problems for them, and a staggering 35% of divorced respondents cited conflict about money as the primary reason for their divorce. In my opinion, a vast amount of this conflict could be overcome by couples understanding their differences and — most importantly — communicating with each other about money.

You don't always have to agree with each other — you just have to be willing to discuss money issues together and potentially to compromise.

You set out a budgeting system to track every single dollar.Why should people track every dollar? Surely this can’t be that important?
Tracking every single dollar that you spend for a period of at least three months (preferably longer, but aim for a least one quarter of the year) is vitally important. Most of us — and you may not believe this but it’s true — most of us have no idea where a lot of our money goes. No idea! We might have a fantastic budget that balances everything out nicely, but often it will bear no relationship with what we actually spend. A birthday gift here, a night out there, some clothes that were on sale, an extra-large phone bill. Not to mention bank fees, overdue fees, rising petrol costs ... it's a very, very long list. Tracking every single expense (on an Excel spreadsheet) for at least three months will tell you exactly where your money goes. And once you know where your money is being spent, you can put strategies in place to reduce your costs.

Do you think couples can marry too easily without knowing each other’s money ideas? Should couples talk about it more prior to marriage. Some couples believe marriage will solve problems.
In an ideal world, couples would discuss all manner of things - career ambitions, family dreams, financial goals, and spending habits, ideal location - before getting married. In reality though, we often don't! But, it's never too late! The better the communication that couples have between themselves, on all issues, the less conflict they are likely to have in their relationship. But it’s never too late to turn over a new leaf and start talking.

You would have worked with a lot of couples over the years with money problems. Is there a story or special case which stands out for you? One you can share with our readers.
One of my strongest memories actually is of two couples that I saw in the same day, back when I was a fairly new planner — maybe just a year or two into it. In the morning I saw a couple who were in their late forties, both professionals on high incomes. But they were on the brink of splitting up because of their financial problems. Basically, despite earning over $300,000 a year they were spending more than they earned and were badly in debt. The atmosphere between them was so strained — it was a very emotionally draining session. Later on that same day I met with a couple, both blue-collar workers on, well, not minimum wage, but certainly not high-income earners. Very, very modest. Yet they had paid off their mortgage, had no debt, were saving regularly and were heading overseas a month later and were in a financially secure position. And they were happy together! It really drove home to me the saying that it's not what you earn, it's what you do with it that counts. It really, truly is!  

If someone came to you drowning in debt and they could not see the light at the end of the tunnel, what three things would you get them to do first?
First I'd help them to do a budget. I'd get the past 3 months worth of their bank statements and work through them transaction by transaction to help them understand where their money was going.

Next, we would find as many ways to cut back on their spending as possible. Get rid of bank fees, look at their utilities, their phone plans, their grocery spending — everything. Most people would be amazed how much they could cut back if they go through all their expenses with a fine tooth comb.

Finally, I would get them to be proactive about their debts. To contact their creditors and arrange a repayment schedule; to review their loans and consolidate onto a lower interest rate where possible, to take responsibility.

Being in control and proactive would lift a huge weight from their shoulders and show them the light at the end of the tunnel.

You have written many articles in newspapers about money and budgeting. Is there one which you really enjoyed writing as you loved the subject matter? Can you tell us a bit about this one?
I love any and every subject to do with money — I'm such a finance nerd! I really enjoy writing my news.com.au Money Stuff blog because blogs are so interactive — it's sort of like the talkback radio of writing. It's great!   I also really love writing my News Limited Gen Y column — our editor thinks up some fantastic topics and I get along well with the other columnists. We love having a bit of verbal hoisting; a bit of give and take with our answers. I just love writing!

The Global Financial Crisis hit in 2008. Did you notice a change in people’s behaviour around money? Have people resorted back to their old ways or kept them up?
People have definitely become more careful with their money since the GFC, which is fantastic. And by and large, I think people are still being careful — much to retailers' dismay and my delight! No doubt that will change over time - short memories, and all that —but more care with how we spend our money leads to more retail competition and a better quality of retail offering — they can't get away with being confident that they can sell us just any old stuff.

If you could go back to your 21st birthday what advice would you give yourself about money going forward?
Ha, ha, ha! That's far too long ago for me to remember! No, just kidding. Maybe to be a bit less wasteful when younger — but then everything is a learning experience.

Have you always been good with money, or was it a skill you had to develop?
My parents were always good with money. Dad enjoyed earning it and spending it on fantastic things; Mum was always a careful budgeter. Importantly they always trusted each other and made money decisions together. So I had very good role models. Having said that, I'm sure I forgot all their good lessons for the first year or so in the workforce! That in itself is a good learning experience though.

I don't think that anyone is naturally good with money. You can have good role models, which helps, and you can have an enthusiasm for learning, which definitely helps. Anyone can learn to be good with money though.

What is the worst mistake you have made or worst purchase?
Mmmm, I can't think of anything significant enough to mention.

Do you have any other books in the pipeline?
Yep, my next book is called Money for Nothing and is being published by Wiley in January. Keep an eye out for it.

Thanks Justine.