Relationships and Finances: Avoid These Mistakes
Don’t Let Money Come Between You and the Person You LoveKathy Longo, CFP®, CAP®, CDFA Monday, 27 July 2020
Relationships, by nature, are fraught with challenges. Busy schedules often mean not spending enough time together, silly arguments about who should do the dishes can build to resentment over time, and jealousy or control issues permeate many relationships. When you add in difficulties related to in-laws or infidelity, things become even more complex.
Despite all these potential troubles, the biggest relationship roadblocks tend to be related to money. Financial disagreements can sink a relationship quickly, so it’s important to go be proactive and work together with your partner to avoid the most common money-related relationship mistakes.
Lose Your ‘Right or Wrong’ Mindset
Perhaps the biggest mistake you and your partner can make is to approach your financial disagreements from a “right or wrong” mindset. You know the one that tells you one of you must be right and the other must be wrong? This type of framework is common since more than 70 percent of individuals have money management styles that are different from their partner’s, but it’s also incredibly destructive.
This zero-sum money mentality usually arises because we feel threatened – after all, money is essential to all of us and it’s scary when someone else’s decisions can impact our security – but proving one another wrong won’t solve anything. Instead, try to look at the situation from a positive angle. Maybe you and your partner are actually stronger because of your different views on money.
Consider this example:
John and Stacey argue about saving all the time. Stacey feels like John isn’t a strong partner in planning for the future because they are behind on savings goals due to his spending habits. John feels like Stacey can never live in the moment, and he believes it’s pointless to earn money if they can’t enjoy it in the present. Truthfully, each of them has a point. By remembering that there isn’t a right or wrong approach, Stacey can benefit from John’s mindfulness of the present, and John can benefit from Stacey’s habit of taking the long view of their financial future.
Don’t Let Your Differences Fester
Even couples who share a money management style will disagree about finances sometimes. The goal isn’t to always see eye-to-eye; rather, it should be to hash out your differences, come to a solution, and then move on.
Here are a few helpful steps to take:
Step 1: Address the Problem Openly and Honestly
It’s easy for us to get set in our ways, but there is truly no point in having the same argument over and over again. So, flip the script and turn your next fight into an opportunity for a constructive conversation. Make sure it’s the right time and place so you can both properly focus on the topic at hand and try to keep emotion out of it as much as possible. Remember, this conversation is about solving the problem, so focus on listening instead of talking and understanding instead of confrontation.
Step 2: Just Breathe
Money conversations are often messy and complex, meaning they are never easy. When you do feel your emotions rising to the surface, take a few deep breaths to calm your adrenaline, and deescalate the situation.
Step 3: Be an Active Listener
Listening is a truly underrated skill in life, and certainly in relationships. Too often, we find ourselves preparing what we want to say next, rather than actively listening to what our partner is saying. Make an effort to fully concentrate on what you’re hearing and respond to it before you jump into your own statements. Focus on listening from a place of empathy and try to put yourself in your partner’s shoes.
Step 4: Absolutely Do NOT Interrupt
See above about listening! Interrupting will come across as disrespectful, and if you’re preparing to interject it means you aren’t practicing active listening or working to truly understand your partner.
Step 5: Remember that Rome Wasn’t Built in a Day
Your first conversation about a money issue may not end in a perfectly developed compromise. Chances are, you’ll end up committing to try to meet in the middle and to having follow-up conversations to make sure you continue to be on the same page as you move forward. Regular conversations about things like your earliest money memories, your retirement dreams, and how much to spend on take-out each week will continue to lead you toward a greater understanding of one another’s money style.
Always Remember You’re on the Same Team
It takes work to iron out financial disagreements in a relationship, but it’s constructive and important to do so. You chose your partner for a reason, and oftentimes our differences make us stronger in the long run. If you remember not to see one another as enemies and you strive to find balance in your money management styles, you and your partner can trust in one another and move forward stronger… together.
About the Author
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.