The importance of talking about money with your honey

Have a positive discussion about money 

Discussing finances with your partner in a positive way; about what you want for your future, your values and your feelings about money can help you understand each other and work together to achieve what you both want. Money touches just about everything in our lives, and having positive communication around money and supporting each other's values can be a real strength in a relationship.²

If you haven’t already, make some time to sit down and talk about money with your partner. It doesn’t have to be over spreadsheets and budgets. In fact, better if it is not. Instead talk about what you value in life; adventure, stability, family. While we all value different things, understanding what’s important to each of you can help you understand each other’s attitudes to money.

Plan for your future

Most importantly, spend some time to plan for your future together. If you don’t discuss your hopes for the future, you end up making assumptions about what the other person wants. And having an open conversation about your future helps you plan for it, rather than just letting it happen to you by default.²

If you are planning to have a family, that can have a major impact on a woman’s superannuation, which in turn can have a major bearing on your shared retirement plans. Women, on average, take five years out of the workforce to care for children or a family member, which can cause their super savings to stagnate and begin to fall behind those of men.³

Talk first, then take action

If you plan ahead there are some things you can do to bridge the gap in super that taking maternity leave can open up. If you are a member of an ESSSuper Defined Benefit Fund, your paid parental leave is regarded as ‘normal service’. So, during this time, your super benefit will continue to accrue in line with your chosen contribution rate.

Your partner can benefit from being with ESSSuper too

Did you know that if your ‘partner’ (spouse, de facto, same sex partner) is not a member of ESSSuper, they can still open an ESSSuper Accumulation Plan? It’s worth remembering that money can’t actually buy access to the advantages of being with ESSSuper. It’s an opportunity exclusively available to your spouse, due to their relationship with you as an existing ESSSuper member.

The advantages of contribution splitting

With an ESSSuper Accumulation Plan account you may be able to take advantage of ‘contribution splitting’ that allows you to split some pre-tax contributions with your spouse or partner.⁵ And in some circumstances, you may be able to transfer up to 85 per cent of your concessional contributions (e.g. employer and salary sacrifice) into your partner’s superannuation account. However, Defined Benefit fund contributions can’t be used for contributions splitting and remember, contributions splitting counts towards your overall concessional cap of $25,000 (not your partner’s).

You may also be able to make spouse contributions

If your partner’s income is less than $40,000 p.a. you may also be able to make a ‘spouse contribution’ and earn a tax rebate. Qualifying members can contribute up to $3,000 p.a. after tax into their spouse's super and receive a tax rebate, up to a maximum of $540 a year.

Both of these strategies provide a great way to bridge the gap that often happens to super contributions during maternity leave, or other factors that can impact on a spouse’s super.