Money and Relationships

Whether you're getting married or just getting serious, mingling money with a significant other often comes with unintended consequences. So this week, we'll explore how money may affect relationships at each stage – from establishing a home together to having kids and beyond.

Conflicts About Money Are Common

According to a study by Fidelity Investments, 44% of couples admit that money is the most significant source of stress in their relationship. This statistic underscores the findings of the American Institute of Certified Public Accountants, which consistently ranks financial issues as a top cause of marital discord, even surpassing disagreements about children.

The reasons for conflicts about money are multifaceted. One issue with new relationships may be a loss of financial autonomy. Before a relationship, your money was your own – no questions asked. But when you're in a relationship, perhaps you need to consult with your partner about purchases. Or maybe you come to rely on your partner for some of your financial needs. For some, this transition can be unexpected and challenging.

Another reason why money has the potential to cause tension is the clash of different financial personalities. Psychologists often categorize people into distinct money personality types: spenders, savers, avoiders, and planners. A couple can be a great match overall, but when they move beyond dating, attitudes about money come into sharper focus.

If a couple's money personalities differ, misunderstandings and conflicts may arise. For example, a natural saver might feel anxious or resentful when their partner, who tends to be a spender, makes what they perceive to be unnecessary purchases. On the other hand, the spender may feel constrained and judged by their partner's frugal tendencies. Understanding and respecting each other's money personalities is crucial for maintaining harmony in the relationship.

Money Can Enhance Relationships, Too

While money can be a source of conflict, it can also be a powerful tool for strengthening your relationship. Setting and working towards shared financial goals can enhance relationship satisfaction and provide a sense of partnership. Whether saving for a dream vacation, working towards homeownership, or planning for retirement, having joint financial goals can bring couples closer together.

In addition, setting these goals encourages open communication about money, helps align individual priorities, and fosters a sense of shared achievement as progress is made. Working together on financial goals can also help couples develop essential relationship skills such as compromise, patience, and mutual support.

The Role of Financial Education

As a couple's financial life becomes more complex, financial education can play an important role. A FINRA Investor Education Foundation study found that couples with higher levels of financial literacy reported lower levels of financial stress and greater relationship satisfaction.

Engaging in financial education together can be a bonding experience for couples. Whether completing courses together on this website, attending financial planning workshops, reading finance books together, or consulting with a financial advisor, these activities can help couples develop a shared understanding of financial concepts and strategies. This shared knowledge base can facilitate more productive financial discussions and decision-making processes both today and into the future.

The Takeaway

There's no one-size-fits-all approach to managing money in a relationship. The key is to find a system that works for both partners, aligns with your shared values, and supports your individual and collective financial goals. With open communication, mutual respect, and a willingness to work together, couples can turn the potentially divisive topic of money into a cornerstone of a healthy and lasting relationship.

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