By Laura Southall CFP® CLU® Senior Wealth Advisor
The Southall Group
Assante Financial Management Ltd
Money, when managed correctly, can make your relationship stronger, but it can also tear your relationship apart. Working through financial problems with a partner isn’t always easy, nor should it be, and it will require some trial and error. You both come to the relationship with your unique money story and your money style. When you can work through your differences and figure out a way to run your finances smoothly, you will be free to focus on the other aspects of your relationship.
68% of Canadian divorced couple state that money was the number one cause of their separation 1, while 36% of Canadians have admitted to committing “financial infidelity” where couples with shared finances lie to each other about money 2 . This could be hiding a large purchase, having a secret credit card, or amassing debt without the other partner’s knowledge. Three important factors in any relationship are shared goals and values, respect, and communication. Let’s explore each of these factors and examine how money plays a significant role in each.
Values and goals
If you and your partner have shared values around money, your relationship will be smoother. You will be able to set goals and work toward them together and you’ll be able to celebrate the achievement of these goals together. Say, for example, that you are part of a couple whose values include being debt free, you might have a shared goal of paying off your mortgage quickly.
You could work together to make decisions that would support that goal like making extra mortgage payments or forgoing a new car to continue paying down the mortgage. Then, when your goal is achieved, you could celebrate your accomplishment together. This could make your relationship stronger. In contrast if you value being debt free above all else, and your partner values travel, you might instead be making spending choices that put you at odds with each other, pulling you apart.
If you don’t know what your partner values, it is time for a conversation. You won’t have all of the same values and goals but being aware is a starting point. Here are some topics that could be discussed:
Credit card debt
Mortgages
New vehicle purchases
Spending on big ticket items
Giving money to children
Saving
Travel
Financial support for extended family
Retirement
Paying bills
Big picture life goals
Respect
If you can respect that your partner has a different money story, a different money style, and as a result might have different values and goals, you can try to learn from each other’s differences.
Your partner might make different choices with money, and if you can respect those choices by reminding yourself of your different money backgrounds, you may be able to mitigate the tension that can arise when you have conflict.
Everyone spends based on what is important to them. If you can work on developing a mutual respect for each other’s decisions, you will go a long way to reducing the financial tension in your relationship. For example, if you value live music concerts and your partner values home decorating, find a way to allow for both in the family budget. Show a mutual respect for each other’s spending choices.
Communication
If you and your partner can communicate openly about money and understand each other’s perspectives, you should be able to set goals and make spending decisions together. Communication will make your relationship stronger on many levels. For many, talking about money is an acquired skill and money impacts so many of the decisions you make as a couple. Where you live, what you eat, how you get around, how you entertain yourself, how you raise your children—all of this is dictated by your financial situation. There’s no end to the impact that money has on your relationship and life.
How to communicate with your partner about money
Maybe you and your partner already have a good system for discussing your finances, or maybe you could use a communication tune up. Either way, consider the following suggestions:
Set some emotional ground rules for your talks, such as making them honest, open and judgement free.
Always be respectful in trying to understand your partner’s perspective. Never lose sight that you were shaped by different money experiences.
Be proactive with your meetings, rather than waiting until an issue comes up. Set a date, with start and end times for your money talks. These could be weekly, bi-weekly, or monthly.
See yourselves as a team, if you are open and honest with your partner, you can work together to achieve what is important to both of you.
If you still can’t have a reasonable discussion about money, get professional help. Your marriage could be at risk if you don’t work out your differences.
Everyone, and every relationship, is different
Everyone grows up with their own money style and behaviours. Then they join a relationship with another individual who also has their own money style and behaviours. This can be difficult to navigate. But, if you and your partner can communicate, respect each other, and share values and goals, money will actually strengthen your relationship.
It is important to remember that you and your partner will grow and change over time. Your personal situations may change, your careers may change, your earning ability and goals may change. You will have to communicate, adapt, and adjust multiple times in a relationship to find a set up that works best for each new situation. Shared money in a relationship is a work in progress and it requires effort and communication to keep it on track.
Laura Southall is a Senior Wealth Advisor with Assante Financial Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Financial Management Ltd. Please contact her at (613) 877-3992 or visit www.laurasouthall.com to discuss your particular circumstances prior to acting on the information above. Assante Financial Management Ltd. is a member of the Mutual Fund Dealers Association of Canada.
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1 “BMO Fourth Annual Valentine's Day RRSP Study: Canadian Couples at Odds on Who's the (Retirement Planning) Boss.” BMO. Bank Of Montreal, February 12, 2014. https://newsroom.bmo.com/2014-02-12-BMO-Fourth-Annual-Valentines-Day-RRSP-Study-Canadian-Couples-at-Odds-on-Whos-the-Retirement-Planning-Boss.
2 “Omni Report: Financial Infidelity.” FP Canada. Leger, January 9, 2018. Financial Planning Standards Council, Credit Canada. https://fpcanada.ca/docs/default-source/news/financial-infidelity-omni-report.pdf.