Having financial trust in a relationship is essential.
Unfortunately, most people are not skilled in managing their money effectively.
On top of that, they have unhealthy relationships with money that create powerful habits, usually leading to poor spending choices. It’s a recipe for bad money behaviors, that people usually prefer to keep to themselves. In a relationship or partnership, these secrets can have terrible consequences.
Either the badly behaving partner (or partners) get into a dire financial situation, the other partner finds out about the secrets, or both.
This scenario leads to high conflict and resentment for life and business partners, couples who are dating or living together, or those who are married or about to get married.
Watch below for my advice for helping couples navigate their way through financial stress in a relationship.
Transcript:
Being on the same page about money can make or break a marriage or partnership. Finances are the biggest cause of stress in relationships and are often cited as the reason for break-ups and divorce. So what can you do if there is tension or even fighting over money in your relationship
The very first thing that each person needs to do, on their own, is get a better understanding of their relationship with money, their current behavior with money, and what their values are. A financial coach can help you gain this clarity.
Then you and your partner can come together to share what you have learned about how your past affects the way you feel and behave with money today, what you realize about your current habits, and what’s important to you with money now and in the future. Each partner really needs to try and understand what the other is communicating here, instead of trying to impose their beliefs, values, or goals on the other one. This step is about understanding your partner.
Each partner should also disclose here the steps they are individually taking to better align their behavior with their values and goals. Plenty of us say that we want to accomplish something, like saving up for the downpayment on a house, but then act in contradiction and blow a bunch of money on an expensive new car lease or purchase. And this isn’t to say that if you have a goal, that every last dollar you earn that’s not use to shelter or feed you has to go towards this goal, so this is the purpose of a values-based budget. A budget that breaks down your spending by how important each category of spending is to you now, while also being mindful of your longer-term goals. In this step, you and your partner share what your values-based budgets look like and how you plan to adjust your actions to spend in alignment with your budget.
The end of this conversation is where each person acknowledges any unhealthy habits or behaviors they realize that they have. Partners may need to, without justifying it, explain the deeper causes of previous bad behavior and acknowledge the damage that it has done to the relationship. The worst of it, is destroying trust. And a partner who has done this will likely need to agree to accountability and/or a new level of transparency in order to repair the trust. Financial trust is a big one, just like trust in general is big in a relationship, and it should be protected. If it’s violated, just know that it’s going to take a lot to restore it.
Then after each partner feels like they were genuinely heard and understood, the conversation about compatibility of values and goals can begin. Does each of you feel safe and comfortable with how the other wants to behave with money? Is there a way to budget your spending that works for both people, and gets them what they both want? Maybe some finances have to be separated out so that each person can pursue their own goals, while some money goes to common expenditures. A financial coach can help you design a system where together, you can each pursue your financial goals and spend in alignment with your values.
Values are a big thing and underneath it all, this is what I believe most couples are actually fighting about when they think they’re fighting about money. Either each partner doesn’t understand the other partner’s values and make room for them, or the values are so incompatible that they can’t both be honored within the relationship. Sometimes, this discussion illuminates that two people are financially incompatible. I’ve seen it happen, but most times it can be resolved by understanding both people’s values and figuring out how to help them be respected and expressed in the relationship with the financial decisions they make.
Another important recommendation that I have for couples is regularly planned financial dates. These are the times that you set aside, weekly or monthly, depending on the couple. In this time you talk about money. I recommend that it start light, like talking about what you are grateful that you bought in the last month. And then eventually you get into any missteps that were made, maybe where you see that you overspent and how you’ll correct that in the upcoming month. Then talk about the immediate future – any big purchases that you’re considering, any big expenditures that you see coming your way. And what counts as big is agreed upon beforehand. Finish this conversation by acknowledging good money behaviors, how much closer to your goals that you are, and thanking your partner for being such a great money partner. Of course if things aren’t going so great, this would be the time to share concerns or frustrations and to request different behavior, and then make agreements.
Good luck couples and I’ll catch you in the next one.
