Oh, For the Love of Money

They say that love is more important than money – but have you ever tried to pay your bills with a hug? I heard this recently and it made me chuckle. Last Saturday, Jill and I went out for supper with some ol’Mansfield buddies, I’ll call them Lou and Tish.  As recent retirees, they have extra time on their hands and Tish was knee-deep in helping their son and his fiancé plan their wedding next spring. And while she was focused on the details of the wedding day, Lou was more concerned about their financial matters. His son, Sam, was a free spender, whereas his fiancé was clearly much more frugal with her money and Lou felt they needed to discuss this key difference between them before the wedding. They had already had a few “discussions” about how they were going to manage the costs of their upcoming nuptials and Lou figured this was just the beginning.

Being a wise old man (his words) had given him some insight into the problems that can arise when two people have different, or in this case, truly polar views of money. Having tackled this issue (but to a lesser degree) in his own marriage early on, he understood that these differences can cause real problems if not addressed.

I agreed with him because I often see folks who continue to struggle with tension in their relationships due to their differences, sometimes throughout their entire marriage. Everyone has their own beliefs, habits, and experiences surrounding money, which start in childhood and continue into adulthood, and when your beliefs don’t line up with those of your partner it can create real problems. So this week, with our time together, I’d like to look at how couples with differing “money personalities” can co-exist with less conflict.

You might be asking, is this really important? After all, a lot of us have chosen partners who have different personality traits and they seem to get along just fine. But to that I’d say, your money personality is what influences how you manage things like budgeting, spending, credit, and debt. Over-spending by one partner, for example, can make the more frugal partner anxious whereas the spender may see the frugal person as being too stingy. This can create a lot of unnecessary stress and conflict.

Of course, not being in 100% agreement over money doesn’t mean that you can’t have a happy relationship, but you may need to work a little harder to achieve it. It has its advantages and disadvantages.

Now on the plus side, being with someone with an opposite money personality can give you insight into a different financial perspective. If you’re the spender in the relationship, for example, dating a saver could expose you to positive money beliefs and habits that you may not have experienced growing up. Or, if you’re the saver, you could be the one to set a positive money example for your spender partner.

The downside, of course, is that money can become a source of disagreement between the two of you. For instance, you may each have certain money deal breakers that could make the relationship a no-go. Such as, taking on too much debt, having a poor credit score, lying about or hiding money, or in some cases, just being unwilling to discuss money.

This last point is crucial. For relationships to work, couples need to be willing to discuss their finances. Fortunately, 81% of Americans who live with a partner or spouse said they’re “very” or at least “somewhat” comfortable having conversations about money, according to a new survey from the AICPA₁, which also shows avoiding the topic can have negative consequences.

Nearly three-quarters (73%) of respondents said financial decisions have caused tension in their relationship, with more than a quarter (26%) stating that happens at least once a month. Among couples who are married or cohabitating, get this, 69% have disagreed over financial decisions in the last year, according to the survey. Most of the rifts came down to needs vs. wants, spending priorities, making purchases without discussing them with a partner first, and paying off debt.

More than 40% of Americans who live with a spouse or partner said it’s at least “somewhat likely” they’d end a relationship over financial dishonesty, such as discovering a partner had large amounts of undisclosed debt or secret bank accounts, according to the survey.

So, what do you do if you find yourself in this position? Assuming you’re in the relationship for the long haul, here are a few tips to help you better navigate your future finances.

For starters, it helps to just acknowledge and accept your differences. While you don’t have to necessarily accept bad financial behavior, you do have to accept that you and your partner are two different people, with two different money viewpoints.

Be sure to communicate. You should each feel comfortable discussing how you feel about money and how to manage it in the relationship. Talking regularly about money can help you both understand where the other person is coming from and what’s driving their money beliefs.

Be respectful of your each other’s financial goals and priorities. Respect is essential to any relationship, even when money isn’t a concern. This includes potentially splitting joint costs in a way that appeases you both. For example, if one of you makes significantly more money, then instead of splitting expenses 50/50, you might agree to split them based on how much you each make.

Speaking with a professional can also help couples come to alignment on money matters. Having an unbiased resource who can look at things from a different angle and help you to see eye can be quite beneficial. Now, we all know that money can’t buy love – but as they say, it sure improves your bargaining position!

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, and Mansfield, MA. Insurance offered through its affiliate, CutterInsure, Inc. We do not offer tax or legal advice. Jeff can be reached  at jeff@cutterfinancialgroup.com

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https://www.journalofaccountancy.com/news/2021/feb/financial-discussions-important-for-couples.html