Money & Relationships - Communication is KEY

Money is a top source of relationship stress, but good communication can help.

If money is causing stress in your relationship, you are not alone. Consider the results of the following research: 

• The 2023 American Psychological Association report on stress ranks money as a top-ranking source of stress for Americans, a trend that goes back many years.

• Marriage.com lists financial reasons as #2 for why couples divorce. 

 Clearly, relationships are affected by finances, with a third of adults with partners reporting that money is a big source of conflict. With that said, marriage can have some notable financial advantages: it doubles your income without doubling your expenses, can be a plus for some tax benefits, and if your goals are synchronized, two can reach their goals more quickly than one can alone. So how can you leverage your marriage to be an asset for your finances instead of allowing your finances to create havoc in your marriage?

Let’s look at some of the major pain points.

Financial infidelity - hiding money and purchases from your spouse or S.O. can be an enormous source of tension between couples. Statistics show 1 in 3 admit they have hidden purchases from their partner. Thus, the title “Communication is KEY”. Lack of trust resulting from financial infidelity cripples an otherwise good relationship.

A second problem-maker is debt brought into a marriage or accumulated along the way. Debt in a marriage can be a result of unexpected expenses such as medical bills or car repairs; overspending or buying too much home or car; major impulse buys; job loss; unrestrained credit card spending; and the list goes on. Debt is an unwanted stressor and takes a negative toil on your finances.

A third source of frustration and conflict can result from an attitude of yours, mine, and ours with no plan in place. Many articles have been written on the advantages or disadvantages of joint accounts versus separate accounts. The right choice is the one that has been openly discussed and works best for your family due to each situation and individual being unique. It begins with a well-developed plan for cash flow. Again, communication is key!

Another really big hurdle to handling your finances in context of a relationship is the inherent differences of personality and upbringing represented by the two individuals. Some people tend to be more cautious and others adventurous; some lean towards saving while others spending; some are more anxious over money while others have a care-free spirit. Many of these feelings, habits, and tendencies began in childhood; and even if some can be dysfunctional in a family setting, they are familiar and can have a gravitational pull. Opposing attitudes, contrasting financial priorities, and an unwillingness to compromise can all lead to stress over money. If left unaddressed, money anxieties can become far bigger problems with no easy solutions.

So how can we navigate through all these pain points? You guessed it – COMMUNICATION.

Better communication can be achieved by open, honest discussions that convey hopes, fears, goals, and expectations. This can best be done before entering financial commitments together, but there is no time like the present for those already committed! Trust can be regained if there has not been an atmosphere of openness, by simply agreeing to talk about wants, needs, frustrations and then working together as a team. Shared goals can be a powerful connector, even if that means compromising so that both people feel heard, understood, and appreciated for their perspective and values. Shared responsibilities and involvement to achieve these goals is an important component in a couple’s financial life. This means evaluating where you are and where you want to be while respecting one another, practicing empathy and not defensiveness, forgiving past mistakes, and moving forward together.

One of the best investments you can make may be to get professional financial help. As financial advisors, we help people develop a plan that encompasses their goals and dreams and is unique to their financial situation. It is one way to further communicate with your spouse or partner while getting objective financial advice.

As they say, teamwork makes the dream work!