Relationships and Money: Three Common Mistakes to Avoid
Ask any therapist or relationship expert and you’ll hear that one of the key ingredients to a healthy relationship is open and honest communication. This not only includes having honest conversations about the big things like feelings and expectations but also about finances. Too often, couples avoid money conversations out of fear that the conversation will be awkward or get contentious. This is especially the case if you and your partner have different goals, habits, or values when it comes to your money. However, making money conversations a regular part of your communication can help you avoid any potential financial disagreements or setbacks in the future while also ensuring that you’re both on the same page.
No matter where you are in your relationship, or where you both are on your financial journeys, your relationship can benefit significantly from more intentional and consistent financial communication.
First: How Relationships and Money Intersect
Contrary to popular belief, divorce rates in America are actually at a record low for modern times. While it’s typically said that half of all marriages end in divorce, statistics show the number is closer to 40% for first marriages. That’s still quite a large number of relationships, however, so it’s important to know the factors at play so you can troubleshoot them in your own relationships. Studies on the topic vary when it comes to reporting the leading cause of divorce, but financial concerns remain one of the more common issues across studies.
It's not hard to understand why money has such a big impact on our relationships when we look at the ways it intersects with almost every other part of our lives. Also consider the fact that each of us comes into a relationship with our own unique understanding and relationship with money, shaped by our upbringing and life experiences. Things can become even more complicated if one partner is making more than the other or if there are dependents or elderly parents involved that are also impacting the financial situation of one partner or the other. All these issues intersect to create a unique financial landscape that couples must navigate as they build a life together. The best way to inform your navigation is to talk about money openly, honestly, and consistently.
See Also: Divorce - The Retirement Killer
Setting the Groundwork for Money Conversations
Sometimes, getting started is the hardest part. Try approaching the topic with a team mentality rather than thinking in terms of “you versus me.” That means making room for both of your perspectives, realities, values, and goals – which can often be easier said than done. To do this successfully, you and your significant other must both be intentional about treating one another respectfully and leaving judgment out of the conversation completely.
As you begin to have money conversations, keep your eye out for these three common mistakes that cause many couples to stumble:
#1: Don’t hide any skeletons in the closet, such as debt.
Many people feel ashamed about parts of their financial situation, especially around the topic of debt. However, keeping your debts from your partner can lead to unpleasant surprises and conflict the next time you two come together to tackle a shared financial goal. It’s better to be upfront and honest about what you owe and to whom so that you and your significant other can remain on the same page and maintain complete clarity about your individual and collective financials. Also, by being honest with your partner about the more unpleasant side of your finances, you’re working to build a solid foundation of trust from which you can both build upon in future money conversations.
#2: Don’t let separate accounts keep you from full transparency.
Not every couple is going to merge all their accounts, and that’s okay. For some, it may make more sense to keep separate accounts. However, this should not be used as a shield to keep each other in the dark about your spending and saving habits or the current reality of your financial situation. It’s still important that you have regular check-ins with one another to create a unified budget and to hold one another accountable. That doesn’t mean that you need your partner’s permission to spend money, but it does mean that you owe it to your partner and your relationship to be transparent about what’s going on with your accounts so that you’re both aware of where things stand.
#3: Don’t stop working together on your financial goals.
Couples who act as a team, working as one toward a shared vision of the future, stand the greatest chance of lasting. This includes working together as a unit to set and achieve short- and long-term financial goals. Work with your partner to build a financial future that you’re both excited about and then put a plan in place together. You’re likely to see that working side by side will not only help make your relationship stronger, but your shared goals will be easier to achieve, too.
Final Thoughts on Couples and Money
Avoiding common money mistakes in your relationship has two benefits. Not only are you likely to enjoy greater financial success, but you’re more likely to create a strong bond as a couple, too. If you aren’t sure where to start, sometimes it’s helpful to have a third party facilitate your discussions.
If you think you would benefit from a conversation about your financial plans or how to have more productive money conversations at home, please give us a call today.