Money can be a scary subject. Something about money brings a taboo feeling to many couples and is often a topic that does not get addressed until it’s too late. Financial stress is one of the leading causes for divorce in the United States; marriage.com has money rated as the second leading cause of divorce, specifically “lack of financial compatibility.” The lack of financial compatibility leads to stress, the stress leads to miscommunication, and the miscommunication leads to resentments due to a lack of understanding.
It’s no wonder why financial stress is a leading cause of many relationship problems. Our expenses continue to rise year over year, while at the same time the average household income has been staying about the same and the amount that the average American has saved has decreased for the past few years. According to the US Census Bureau, the average household income in the United States was $63,179 in 2018. With an average monthly household income of $5,265, less than 81% have one month’s total household income saved for emergencies without having to borrow from family, tap into credit, or take money from retirement. People are struggling with their finances and that is causing financial stress on many relationships.
First and foremost, realize that you and your partner are on the same team. Sometimes it might not feel like it, but you are both probably wanting your money to provide similar things. Come to the table with this position in mind. Your partner is not the enemy. You need transparency in your finances, and there are a few easy places to get started.
Understanding your partner’s money background
I have heard this called money scripts as well. At the heart of the first step is to understand what money means to each of you and how you approach your money. Each of us has had a completely unique and different set of experiences while growing up. Every individual comes to the table with different expectations on how money should be handled.
If you find that you have opposing views regarding how the household funds should be managed, you may want to start with finding a place in the middle that you can both agree on and build from that place once you begin to see successes.
Accept that you cannot change the background, but you can create a safe place to explore options, find common ground, and make incremental changes toward a new shared vision of money.
Ensuring that you have the same goals
Sit down and take the time to fully understand what your money represents for each of you and your lifestyles. When interviewing couples and talking about finances in my initial interviews, I often discover how many couples, new and old, have completely different views of what their money is for and how they plan to use it. Once you start talking about your finances together, you may find that you are on completely different planets regarding what each of you wants to do with your money. You may find that one of you has only short term aspirations and no long term planning other than that they may eventually want to buy a house or retire while also stating that the money in savings is going to a vacation later this summer, while the other of you has only long term money plans but no short term plans. These views represent extremes, though the point is that there is room for disagreements regarding long-term and short-term planning.
Once you know what you are working for as a cohesive unit and have discovered the financial goals you want to achieve together, it is time review your budget and make the adjustments needed to put you on a path to working together toward a common money goal.
More than anything COMMUNICATION
Very few things build resentment faster in a relationship than having to make compromises and not talking about it. Sure, in a relationship we sometimes have to make sacrifices. If you’re not you should look in the mirror and realize that your partner probably is. When it comes to your finances and you are planning to build a long-lasting life together, you need to talk about what your money is doing and what it represents to each of you in a calm empathic manner. Truly understand where your partner is coming from. Schedule regular financial check-ins with each other, talk about each bill you’re about to pay, talk about purchases you want to make and your goals as they continually evolve through your discussions. One of the best exercises that I can recommend is having a financial date night. Make it a big deal and lay everything on the table on a regular basis. Without open, honest, empathic communication, the potential problems will only accumulate.
Now I never said that it was going to be easy and for most it will not be an overnight success. That said, start by taking the first step, scheduling some time to bring the conversation up and sitting down to listen to each other. It’s going to pay off.
How do you talk about money with your partner? Tell me your stories and your thoughts by leaving a comment below. Let’s have a better money conversation.