Sex and money were taboo subjects, never to be raised at the dinner table, when Paul Clitheroe was a kid. But at other times the British-born financial guru’s father, a doctor, couldn’t curb his enthusiasm for watching canny investments grow.
“Something must have rubbed off,” laughs Clitheroe, “because when I was about to finish university one of my best mates pointed out an advertisement for an investment-related job and said ‘Go ahead! Apply for it! You’re always talking about money! You’ll be hired!” The young man, poised to become a familiar face on television and voice on radio, took what turned out to be savvy advice. He got the job. “But,” he adds, “it still worries me that my university mate regarded me as a natural for the job. To this day I really hope I wasn’t known behind my back as a ‘money bore’.”
A few years later Clitheroe and three campus friends launched an advisory firm called Ipac. It was destined to succeed and still thrives. Clitheroe remains involved in day-to-day activities and helped it expand from its Sydney base to become a national organisation. Before long, Clitheroe became one of the nation’s most respected advisors on money matters.
His latest book, Money, Marriage and Divorce, recently hit bookstores. Written in conversational style, its emphasis is on financial planning in happy relationships – and on what to do when love has flown out the window.”
“If you cling to outdated notions that discussing finance is vulgar, you should “get over it … relationships where people don’t talk about money are often doomed to fail.”
“My publishers initially wanted to call it The Divorce Handbook but I wouldn’t agree because it’s broader than that,” he confides.
Times have changed, agrees Clitheroe who turns 60 this year. He’s noticed a dramatic shift in attitudes during more than three decades of dispensing financial advice. “When I was a boy it was often the case that the husband earned the family income while the wife was responsible for raising the children and caring for the home. Wives were often proud of their lack of understanding of – or interest in – a family’s financial arrangements.
“These days society is very different. Women commonly prefer to have their own accounts and to preserve their financial independence. Young people have numerous financial and other products available to them – so making the right choices is difficult and mistakes can be expensive.
“My next book may well be aimed at the young – helping them negotiate their way through the maze of promoted products in order to select what’s best for them.”
“If you don’t make them, (financial decisions) others will make your choices for you later on – usually lawyers.”
Mind you, Clitheroe isn’t 100 per cent sure there will be another book. “My wife keeps sighing ‘Stop writing bloody books’ and suggests that with three healthy, happy adult children we should travel more. But the trouble is I keep thinking of ideas for another book and my publisher gives me the go-ahead.”
Anchoring Clitheroe’s advice is the mantra: “It’s not rude to talk about money.” If you cling to outdated notions that discussing finance is vulgar, you should “get over it.” In fact, he believes “relationships where people don’t talk about money are often doomed to fail.”
That said, he concedes that money may not be the easiest subject to raise. His advice to anyone frustrated by an inability to talk about money: “Open a bottle of wine and enjoy a romantic dinner. During the meal, steer the conversation gently towards money matters.”
“Open a bottle of wine and enjoy a romantic dinner. During the meal, steer the conversation gently towards money matters.”
Even then there may be strong resistance to discussing the subject from one or other party. Consequently, twosomes drift apart thanks to the unspoken presence of the fiscal fiend (particularly when “money problems” need to be battled). Some financial analysts describe this phenomenon as an until-debt-do-us-part syndrome.
In these situations, one partner continues resisting discussion of financial topics or arranging to see a financial planner (who should be chosen only after careful research, possibly including discussions with people whose opinions are respected) – and perhaps even physically walks away when money-related matters are raised.
Lack of communication on fiscal issues before couples split, says Clitheroe, can lead to acrimonious last-minute agreements that others should decide about financial carve-ups. “If the couple had discussed financial matters openly and planned together their relationship may well have survived.
“Instead, they reach the end of the line. The relationship if finished. Perhaps there’s divorce. And it’s all because they didn’t discuss money.”
Couples should make financial decisions early in their relationships. “If you don’t make them,” warns Clitheroe, “others will make your choices for you later on – usually lawyers. You’ll be forced, at some point, to talk about money – and you’ll pay for doing so.”
PLANNING IS VITAL
● GOAL – Goals are essential. Set a goal: buying property or a car, paying for an education, taking a world trip, whatever – and plan how you’ll reach this goal.
● PLAN – Agree on a plan (for instance, saving a certain amount each week) with the aim of reaching your goal by an agreed date.
● BUDGET – Everyone must have a budget – and stick to it. If you don’t set limits on what you spend on various outgoings any plan becomes meaningless and you’ll never reach your goal.
● DECIDE – In a relationship, agree early on as to who pays what. If expenses come out of individual accounts – rather than joint accounts – a simple example could be that one pays rent while the other buys food. But both parties must consider such arrangements to be fair. Agreements should factor if one is a high-income earner and the other is, say, a struggling student.
Money, Marriage and Divorce, by Paul Clitheroe, Published by Penguin, RRP $19.99