More than a quarter of Australians are living with a spendthrift partner who could be inadvertently harming their financial profile despite making cuts to their own spending, new research has revealed.
Findings from a survey commissioned by money.com.au showed that, while half of Aussies were struggling to meet their essential expenses, 26 per cent thought their partners were spending too much on non-essential items or services.
Younger Aussies are more likely to be dragged into financial instability by fiscally irresponsible partners, with data showing South Australians (30 per cent) are more likely than Aussies in any other state to do so.
This is followed by:
29 per cent of Victorians
25 per cent of NSW respondents
25 per cent of West Australians
24 per cent of Queenslanders
The survey of 1,010 Australians – 841 of which had a partner – showed that more than half (51 per cent) of respondents shared a bank account or credit card with a significant other, and 58 per cent said their partner wasted more than $200 each month. Another 24 per cent said their partner wasted more than $400 a month.
Men were more likely to believe their partner's monthly spending of $100-200 was wasteful (33 per cent), while female respondents were more likely to report that their partner's spending was wasteful at over $600 a month (30 per cent).
The survey revealed almost a quarter (24 per cent) of NSW respondents believed their partner spent $400-$600 per month wastefully. This compares with:
19 per cent of Victorians
11 per cent of Queenslanders
0 per cent of South Australians
17 per cent of West Australians
Across states, West Australians and South Australians are more likely to share a bank account or credit card at 49 per cent and 48 per cent, respectively, followed by:
44 per cent of Victorians
42 per cent of NSW respondents
41 per cent of Queenslanders
Data revealed that respondents in NSW were more likely to have separate bank accounts or credit cards from their partner's (44 per cent), compared to Aussies from other states, as follows:
38 per cent of Victorians
38 per cent of Queenslanders
38 per cent of South Australians
36 per cent of West Australians
NSW had the highest percentage of respondents who confessed to be struggling to meet essential expenses, at 64 per cent. South Australian respondents were least likely to struggle to meet essential expenses in 2022. Across the rest of the states:
45 per cent of Victorians
46 per cent of Queenslanders
39 per cent of West Australians
How to manage finances with your partner
Many Australians may have become used to some luxuries that are too difficult to let go of, especially coming out of a period of extremely low interest rates, according to financial adviser and money.com.au spokesperson Helen Baker.
"With the stark rise in rates, many consumers haven't yet changed their behaviours to accommodate the higher market rate and could be racking up more debt than they were previously," Baker said.
"If this is your partner, a good idea is to review their spending with them and consider: are they spending more because prices increased or are they just spending more?"
Baker also advised Aussies to be cautious about opening joint accounts.
"Finances should be kept separate in the early days of a relationship. Once you have a stable, long-term relationship, there should be a conversation to understand each other's money habits and financial histories," she explained.
"It's critical to remember that once a joint credit card is opened, partners are carrying each other's debt risk, and individuals cannot control the spending that occurs in the account. While a partner's personal bank account spend won't impact their or your credit score, their spending on a joint credit card may - if they cannot make repayments on time.
"If your partner's credit score is low, you may struggle to secure joint mortgages or other loans, as lenders won't view their money habits as trustworthy. To keep autonomy over a relationship, it would be a good idea for people to keep an emergency fund in case they ever need to leave the relationship," Baker said, adding that communication was key for couples and finances.
"Set clear boundaries on your joint spending, and agree on what you each deem wasteful, as people may have different interpretations of what is wasteful to them."