Healthy relationships require open and honest communication – and that includes financial communication. However, it can be tempting to avoid money conversations with your partner, especially if you feel they could be awkward or contentious. If you and your partner have different financial goals, spending and saving habits, or if you disagree on the role that money should play in your life, financial communication could bring these issues to the surface – but it’s also the best strategy to avoid potential financial disagreements and setbacks in the future.
Whether you’re in a new relationship or you’ve been together for decades – and regardless of where you are on your financial journey – read on to learn why your relationship can benefit from more intentional financial communication.
Why Financial Communication Matters
There’s a common misconception that half of all marriages in the U.S. end in divorce. However, recent research on the topic shows that divorce rates are at a record low for modern times – closer to 40% for first marriages. Of course, that still means quite a few marriages won’t go the distance, so it’s important to understand the key factors at play if you want to keep your own marriage or long-term relationship strong. Although the leading causes of divorce change a bit from study to study, financial concerns are consistently one of the most common issues.
The truth is that money is an emotional factor in all our lives, so it makes sense that it impacts our relationships. Money intersects with most aspects of our day-to-day lifestyle choices, and with our big life decisions, too. When looking at the issue through a gendered lens, money issues become even more alarming. Take, for instance, the gender pay gap, or the fact that more women than men leave the workforce to take care of family when necessary, or the fact that women are living longer than men and must depend on their retirement savings to last longer. All these factors fall under the umbrella of financial issues and play a part in shaping the way that you and your partner think, feel, and act toward money.
SEE ALSO: Merging Finances as a Couple: Three Options for Success
This is why a lack of financial communication can wreak havoc on even the strongest of relationships. It’s through these conversations that you and your partner can assign money roles, discuss what you both expect from one another, and build a foundation of respect and transparency to rest your relationship on.
Facing Money Matters as a Team
The best way to enter money conversations is to work as a team to build a financial strategy that makes room for both sets of perspectives, values, and goals. As you begin to talk about money with your partner, keep your eye out for financial red flags and correct any miscommunication about money from the jump so that you’re able to tackle any roadblocks that may come up later on.
Here are three common red flags that couples face and how you can go about avoiding them through strong financial communication:
1. You’re unaware of one another’s debts.
Keeping debts hidden from your partner, or vice versa, can lead to an unpleasant surprise the next time you decide to tackle a joint financial goal together. Instead, be open and honest about what you owe, to whom, and how much of a balance is left on each of your accounts. Having that transparency shows that you and your partner trust one another and helps keep each other prepared for any future considerations that may come up due to debt.
2. Both your accounts and budgets are separate.
It’s not necessary to combine your bank accounts just because you’re coupled up with someone. In fact, for some relationships, it may make more sense to keep your accounts separate. However, even if this is the case, it’s still important that you sit down with one another and go over a unified budget together. That’s not to say that splurging on occasion or having your own things that you want to spend money on can’t happen. However, the best practice is to be honest about how you’re spending and saving your money so that you can ensure each member of the relationship is aware of what is expected of them financially.
Are you splitting the bills or delegating certain bills to one person? How are your retirement plans working to support each other? Are you on track toward your joint financial goals? Having clarity on how much money is coming in – and where it’s going – will help keep both of you on the same page.
SEE ALSO: Relationships and Finances: Avoid These Mistakes
3. You don’t set collective financial goals.
In a relationship, you and your partner likely set joint goals for all sorts of things, like going on a trip or starting a family. The strongest relationships are those where all parties involved act as a unit, working together to support your shared vision for your future. Your finances should work in the same way. Whether financial communication feels awkward or natural to you, money is a critical part of any relationship. So, working together to set short- and long-term goals can help keep you both on track toward creating that future you both envision.
Final Thoughts on the Importance of Financial Communication
Money is a very personal topic for most people, and it may feel unnatural – or even taboo – for you and your partner to openly discuss the specifics of your finances. However, financial communication is necessary if you want to have a successful financial future with your partner. Not only that, but by working on money matters together, you and your partner will be able to strengthen your bond through greater trust and respect. Taking the time to discuss what you want to be saving for, what you expect from one another financially, and how you want your day-to-day lives to look helps smooth your path going forward so that you’re able to tackle any potential hurdles that come your way as a team.
At Flourish Wealth Management, we are proud to partner with women and their families who are committed to making smart financial decisions for the future. Our team is dedicated to providing clarity and instilling confidence to help women create a healthy relationship with their money so that they can feel empowered to live life on their own terms. If you’d like to begin a conversation about your financial plans or learn how you can engage in more productive financial communications at home, please contact us today. We look forward to hearing from you!
