Our significant others tend to be our money opposites.
Nearly half of Americans say they fight about money with their spouse or living partner at least four times a year, according to 2018 research from TD Ameritrade.
What’s the best way to avoid common money problems and find financial harmony? Honesty and understanding. Couples need to respect and accept their partner’s money habits and find a way to work together toward shared goals.
Taking the time to learn about your partner’s relationship with money – the good and the bad – can yield big rewards when it comes to your long-term happiness. To keep your relationship strong, set aside time to talk together and ask these questions. Remember to listen carefully to the answers.
1. What’s your money history?
Talk about your experiences with money:
- Did your parents argue a lot about money?
- Were funds tight when you were growing up?
- Were you taught to never carry a debt?
- Was money an issue in a past relationship that didn’t end well?
Remember that the goal is to understand one another. You don’t need to agree, says Ted Chapin, Ph.D., President of Chapin & Russell Associates in Peoria, Ill., and a licensed clinical psychologist.
“It helps to know where feelings about money come from,” Dr. Chapin says. “Get those issues and emotions out on the table.”
These discussions can be uncomfortable, says Bob Stolz, a financial advisor with the Kelley Financial Group, part of Northwestern Mutual in Cincinnati and Dayton, Ohio. So it’s important to encourage each other to be open and honest.
“Don’t sit in judgment of yesterday,” Stolz says. “Any situation can be addressed. You can map out a plan and deal with it.”
As you and your partner build understanding, you should feel comfortable “weaving your feelings into the solutions,” Chapin says.
2. What’s your money personality?
Are you a spender, or do you save every penny? Is it easy or difficult for you to save for long-term goals? How do you research and plan for large purchases?
Knowing your spending style can do a long way toward creating a household budget and handling regular and irregular expenses and planning for short- and long-term goals, says Hiral Hudson, a financial advisor at The Epley-Wolbeck Group with Morgan Stanley Wealth Management LLC in Peoria, Ill.
One partner might be the day-to-day spender, buying the groceries, prescriptions and items children need for school. The other partner might only spend on big items like a riding lawn mower or new car.
“It can be harder for the day-to-day spender to see the big savings picture,” Hudson says. “If they know what they are saving for, some short-term savings goals can be helpful.”
Couples should discuss what’s important to them and figure out when they can say no – to themselves and to one another. For example, if you’ve got seven weddings to attend this year, it may not be financially sound to buy a new outfit for each event.
Once you start a conversation about your money habits, be sure to listen to the feedback you get, says Dr. Chapin.
“Make adjustments along the way,” he says. “You can learn to save while you teach your partner to live a little and save less.”
3. What are your retirement goals?
Whether you are planning your first wedding or entering a second long-term relationship, it helps to know the end game. Talk together about your dreams and goals for retirement:
- At what age do you want to stop working?
- Where do want to live?
- Do you plan to work part-time?
- Will you want to downsize your home?
- Do you want to travel domestically? Internationally?
Once you agree on a plan for what you want to do in retirement, you’ll need to find a way to fund it. Savings and retirement accounts will of course come into play.
You’ll also need to talk about any debts and other financial commitments, such as obligations or retirement income lost related to a divorce.
“These things can seem insurmountable,” Stolz says. “Couples need to be honest, share what they bring into the relationship and factor everything in.”
Keep money arguments at bay
We make money decisions every day. Some are planned; some are spontaneous and emotional. What’s important is to understand why you and your partner make those choices, Dr. Chapin says.
Couples who argue about money early in their relationships are more likely to end up divorced, according to 2019 research published in the journal Social Psychological and Personality Science.
Money disagreements also account for 41 percent of divorces among Gen X couples and 29 percent of Baby Boomer couples, according to 2018 data from TD Ameritrade.
When you and your significant other are fully aware of one another’s money habits, you are less to likely split.
