When it comes to financial management, we’re all in it together…
Many of us see our financial affairs as private matters. We don’t discuss our salaries, even with close friends or family members. We perceive debt as a source of shame, particularly arrears on bills or rent. Many people wait months or even years before seeking help when they experience debt problems, under the impression that falling into financial difficulties is a deeply personal failure.
This is even reflected in the way we discuss and measure financial capability – as a personal attribute, asking whether a particular person has savings or a pension, can work out the interest rate on a loan, sticks to a budget and knows how much is in their bank account.
But this isn’t true to the way we manage our finances in real life. In practice, very few of us are completely financially independent. Many of us will share expenses or divide up the financial admin related to our family home. You might sort the energy bills and leave your partner to manage the mortgage – sometimes one half of a couple manages nearly all the bills and the other just pays a share. Even if you’re in a house-share with strangers, you’re usually still jointly liable for bills. This sharing of responsibility and support with financial management from family and friends is even more important for people with mental health problems, many of whom tell us they rely on friends and family members for help to manage their finances.
“My daughter has safeguarded me during bad periods of bipolar. She ensures I pay my bills when I’m poorly.”
“My husband and I make financial decisions together therefore I have another point of view.”
“I have a partner whom I can trust to explain things, help make decisions and sort out any problems.”
So we don’t like to talk about money, and particularly a lack of it, yet our financial lives are intertwined with those of other people. Which presents an issue for good, open and safe shared financial management.
What are the elements of our financial lives that we do talk about? Bills, probably, spurred by their arrival and a conversation about when we should put the central heating on. Most of us will have showed off about getting a bargain at one time or another. And who hasn’t had a conversation about the price of petrol at some point?
If we can use these conversations about our day to day financial management to break the cultural stigma around talking about the more difficult bits of our finances, so much the better. But talking about it isn’t enough. Crucially, we need to make sure that financial services, energy providers, telecoms companies and the other firms we deal with every day give us the tools to manage these shared financial decisions openly.
Being able to easily share information about bills, direct debits and accounts with a loved one would be a big help. With more of us managing our energy, water and council tax bills online, we’re less likely to get paper bills we can leave on the kitchen table, to spark that conversation, and most online accounts only let you have one set of login details. Could apps or other online tools be developed which help us share timely information about what we’re using – and how much we pay for it – with those who share the costs, or those who support us to manage? Being able to share information about our financial accounts with family members easily could encourage conversations about spending levels or savings which prompt us to reflect on our financial behaviours and perhaps make wiser decisions in future.
In case of emergency…
We also need to make sure that steps are in place to allow friends or family members to help out when things go wrong. At the moment, if you’re suddenly taken unwell, unless you’ve already gone through the lengthy, formal process of giving someone Power of Attorney or setting up a bank mandate, there’s a very limited amount that friends and family would be able to do to help manage your finances. We need an emergency door into accounts, for trusted friends and family members to at least see what’s going on in an absolute emergency. Registering a next of kin contact as standard on bank accounts, and adding multiple names to utility accounts would be a simple way to fix what, for many people, ends up being a very complicated problem.
Although we don’t like to talk about money, we should accept that our financial management does not take place in a vacuum. We all rely on other people, and for many people with mental health problems this can be the difference between staying on track and a life in the red. It’s time that the providers of financial services, utilities, and energy firms in particular acknowledge this – and allow us to do it in a way that’s safe, easy and encourages those trickier conversations.