Disclaimer: This post is sponsored by PSECU, a Pennsylvania-based credit union.
One of the leading causes of divorce, other than infidelity, is disagreeing on financial priorities. Considering the way money matters can make or break a relationship, those considering tying the knot with their significant other — even on a “someday” basis — benefit from discussing them early on.
Two people may suit each other perfectly emotionally and romantically, but unless they share a common vision for major life purchases, the relationship may fall apart nevertheless. People don't need to make financial planning part of the initial questions asked at a speed-dating session, but once things start heading in the direction of a long-haul love connection, having the money convo becomes critical.
Why Money Matters Cause Rifts
Those who say money can't buy happiness have never torn apart the couch cushions praying to find change enough for gas to make it to work on payday. No, having a cool mil in the bank won't necessarily make one person feel better than another with $100 in savings. However, financial stress — especially when it becomes chronic — leads to depression, anxiety and even addictive behaviors. Some studies indicate that multiple economic crises can result in PTSD, especially in children raised in impoverished homes.
No amount of advance discussion can ward off hard times like job layoffs, housing market crashes or unexpected illnesses. However, failing to mention possible reactions during periods of economic stress can lead to unpleasant surprises. Suddenly, a partner's proclivities for taking 30-minute showers become less like a cute quirk and more like a selfish hoarding of community resources. The result could be anything from a minor relationship skirmish to an all-out war.
Even when both partners earn incomes sufficient to meet their needs with extra to spare, financial disagreements can turn ugly. How does someone compromise, for example, when one partner wants to splurge on a European vacation while the other wants to spend that dough on creating a nursery for future kids? What happens when a significant other wraps a new car in ribbon for the holidays but neglects to mention the $500 payments will need to come from a joint checking account?
The best time for discussing such matters is well before they occur. However, people put off “the money talk” for good reason — it feels uncomfortable. Nevertheless, overcoming the fear of initializing such a conversation is well worth the effort, as it prevents future conflicts.
Tips for Initializing the Conversation
Even people who worry about economic matters constantly seldom take time to ask themselves, “What does money mean to me?” Money, after all, is really nothing more than tree pulp made into paper through chemical means, then printed upon with ink. Money's real significance never revolved around what it was made out of — the value comes from our perceptions of what it can do and make possible.
Before sitting down for “the talk,” reflect on the personal attitudes, fears and benefits associated with having enough. For some, money serves as a gatekeeper to freedom: While the magic number may change throughout life, overall, it comes with knowing a weekend getaway to Paris is within reach. Spending on desires seems both requisite and reasonable — after all, what good is a pile of coins that do nothing but sit in the bank?
Others associate money with security. Having enough means knowing one unexpected disaster won't derail their entire life plan. To such folks, debt creates anxiety, while an ever-growing savings balance makes them feel like a squirrel with enough nuts to survive five winters.
Pick a neutral time to speak — communication breaks down when under stress. Keep the conversation as light as possible. People should ask their loved ones what they hope to achieve financially in life, and more importantly, why. One partner's refusal to drop even $5 for a latte splurge seems more reasonable if they once spent a year deciding between eating and paying rent.
What to Do When People Disagree
When partners disagree on money matters, does that mean parting ways? Sometimes yes, sometimes no. The answer is as unique as every relationship is.
Even partners who fall on opposite ends of the spend-save spectrum can reconcile their needs through creative compromise. For example, some couples may agree to consult on major purchases over $300 but not stress over amounts less than that. Other pairs may decide they can agree to disagree as long as they keep their financial accounts separate.
Nevertheless, remain ready to draw a financial line in the sand. For example, past debt may not pose a huge problem — everyone has made mistakes — but if a compulsive gambler remains in denial about needing help, cutting ties may prevent future heartbreak.
A Lifetime of Romantic and Financial Happiness
Yes, a shopaholic can have a successful relationship with a scrimp-and-saver, but doing so requires honesty, forthrightness, respect and understanding. Keeping the lines of communication open and developing compromises, such as both joint and individual savings and investment accounts, can help. Money can't buy love — but being upfront with spending patterns and personal financial philosophy can make relationships stronger.