Money is the main cause of marital conflict, yet so few couples are willing to talk about critical topics before issues arise.
Nearly 90 percent of divorces stem from money issues, according to Kimberly Foss, founder and president of Empyrion Wealth Management. The marriage might not dissolve strictly due to financial incompatibility, but it can create any number of problems that lead to an eventual divorce.
The importance of having financial conversations before they turn into problems is obvious, but couples across the world remain unaware or ambivalent about financial topics.
Part of the reasoning is that discussing money makes many people uncomfortable. A refusal or discomfort about financial discussions deals with a person’s upbringing or what money represents, according to April Masini, relationship author and advice columnist of Ask April.
Family models about money can have a lasting impact on a person. Some believe it is unromantic, some believe it is crass, and others believe it is odd to discuss money because their parents upheld certain gender norms, Masini said.
Despite being characterized as unromantic, financial savvy is a highly valued trait according to a survey from freecreditscore.com.
Women ranked financial compatibility as equally important to sex and intimacy when considering a long term partner. Ninety-six percent of women picked these two items as important for their serious relationships. Men were not far behind — 87 percent of respondents ranked financial responsibility as important.
As the survey proves, financial compatibility is key to a long-term relationship, but getting this information can be difficult.
Travis Freeman, president of Four Seasons Financial Education, said that a childhood retelling is a good indication of one’s current financial mentality because the stories almost always relate back to money.
“If you grew up poor and worked hard for every penny you have today, you may want to instill the same lessons of value in your future children,” he said. “If your date was a ‘trust fund baby’ maybe you won’t see eye to eye when it comes to allowance, first cars, and college funds.”
One’s upbringing is not the only factor that determines how open a person will be to financial discussions. Science has found that genetics plays a large part as well.
A study by Henrik Cronqvist and Stephan Siegel found that there are biological links to how consumers handle money, either as a spender or a saver. The study, which utilized 15,000 sets of Swedish twins, found that people are born with spending or saving tendencies. One-third of spending or saving behavior is the result of one’s genetic makeup. Although this genetic link can be broken, it does show that some financial traits are stronger than many realize.
But differences are not always bad. Usually differences in emotions and financial outlooks keep a relationship interesting. In fact, several experts said that couples are usually comprised of both a spender and a saver. The spectrums can cause problems, but they can also be utilized in a positive way. Freeman said that it can work as long as there is a joint understanding about finding balance between the two.
In order to find and maintain a balance, there are several topics and discussions that couples should have at different stages in the relationship, spanning from casual dating to marriage.
Casual Dating Stage
A mutual attraction and common interests are some of the initial elements that fuel a budding relationship. Financial compatibility is vital later on, but ensuring that the relationship is worth working towards is the most important. It is wasteful to discuss life plans if both parties have no intention of creating a real relationship, says Laurel House, a dating coach and author of “The No-Games Guide to Love.”
The first few months of a relationship can be lighthearted, but they can be equally as important. Small warning signs observed during casual dates, such as spending large amounts of money while working a minimum wage job, can highlight much larger problems that will arise later.
As time passes, couples can begin to discuss some financial elements, but only if conversations are conducted with respect and reserve.
Masini said that good social skills are necessary to broach these topics during the first few months but there are ways to see if the partnership will work early on. Lighthearted questions about family members’ education, lifestyle, and work illicit telling information in a casual environment.
“You can learn about someone’s spending, saving, values, character and hopes and dreams in the first three months without bringing up a joint checking account,” she said.
Serious Relationship Stage
As the relationship progresses, so should the conversation.
The awareness of a partner’s spending habits should become more tangible during this stage. If one partner seems to spend more than they make, or they refuse to use their money for positive entertainment purposes, the other partner should bring it up in conversation.
In the same way that negative habits should be discussed, so should positive aspirations. It is important to confirm that one’s partner is willing to work for their goals. For example, if one partner wants to take a yearly beach vacation, but the other partner is not willing put away money each month for this indulgence, a conflict could arise.
House explained that transparency in all facets is vital.
“You want to get into a situation with your eyes wide open,” she said.
Serious relationships must also deal with complex issues more and more as couples decide to live together early and without more formal relationship declarations. Living together or buying joint items such as property, cars, or pets can complicate a relationship.
House said that couples need to discuss finances without limitations if they are taking serious steps such as moving in together.
“No topics are too serious or too sensitive to discuss once you are at that level of intimacy,” she said.