For love and money: 6 steps to keeping financial problems at bay in your relationship

Finances can be a major source of conflict – from the beginning of the marrige (e.g., Brotherson & Moen, 2011) well into the later stages.  In fact, in a national US study, researchers found that “debt brought into a marriage” and “financial decision making” were two of the most problematic issues that newlyweds experienced in their first few years of marriage (Schramm et al., 2005). For older couples, finances were among the top 3 challenges couples argued about (Henry, Miller, & Giarrusso, 2005).

Money issues can be especially difficult for those who have different spending habits at the onset of a relationship.  One study found that people were attracted to those who were opposite to themselves in their financial attitudes and behaviours (Rick, Small, & Finkel, 2011).  For example, individuals with tendencies to be spendthrifts (i.e., those easily spent money recklessly) paired up with more frugal tightwads (i.e., those who tended to save every penny).

Researchers explained that when we dislike qualities in ourselves, we are attracted to people who are unlike ourselves in those specific qualities.  For example, if I hate that I’m too cheap then I feel better when I am with someone more generous with his/her money.   Although the attraction may be appealing at first, the problem is that greater differences in spending attitudes are associated with less satisfaction in a marriage (Rick et al, 2011).  In other words, your relationship has a better chance at being happy, if you are with someone whose financial beliefs are similar to yours.

Tips from happy couples

So what can couples to do be in financial harmony?  In another study, happily married couples were asked to write about how they managed money in their relationships (Skogrand et al., 2011).  Here are a few financial tips inspired by the results of this study:

1)      Make financial goals – what would you most like to do with your life and your money?  Many successful couples had financial goals in mind and worked towards them as a team.  Whether that means working to pay off debt quickly, saving for an early retirement, or living frugally to live as a one-income family, goals are important so that both partners understand the bigger financial picture

2)      Build trust – like with any other aspect of a relationship, trust doesn’t come automatically; it comes with effort and consistency.  Once financial goals are established, it is important for couples to regularly show that they are responsible and behave in line with those goals – for example, by paying bills on time or spending within budget

3)      Be open and honest – financial problems or difficulties can arise in any relationship, and especially during these times, it is important to communicate openly and honestly – for example, when you’re facing financial hardship or about to make a major purchase, talk about finances before or as it becomes a problem, not after

4)      Find a system that works for you – for many of the couples, one person is responsible for the day-to-day finances, like paying bills.  For a majority of successful couples, the person with the most desire, expertise, or time took responsibility (in this study, it was the wife 61% of the time).  While some successful couples had joint accounts, others had separate accounts – what matters is that couples are comfortable with their decisions

5)      Live within your means – what better way to avoid problems than by preventing them in the first place.  Since financial worries can be a major stress inducer, find ways to avoid debt completely by paying off debt quickly and spend only what you can afford to spend.  By doing so, successful couples had fewer concerns (and therefore arguments) about money

6)      Work as a team – One of the most common themes across all of the best practices was working together.  Successful couples often made decisions together, worked towards their common goals, trusted their partners to communicate with them openly, and showed appreciation for each other.  Remember that finances are a team activity, not an individual one.

Since the decisions made in the beginning of a relationship can have an impact on future behavior, it is important for couples to come to agreement early on how to spend and save together.  Although knowing about your partner’s spending and saving habits before marriage may help ward off strife in the long run, open communication and building trust can go a long way in establishing new habits at anytime in a relationship. 

Further Reading:

Brotherson, S. E., & Moen, D. A. (2011). Establishing a home: A study of practical dimensions in the transition to marriage Family Science Review, 16, 59-74

Henry, R.G., Miller, R.B., & Giarrusso, R. (2005). Difficulties, disagreements, and disappointments in late-life marriages. International Journal of Aging & Human Development, 61 (3), 243-64 PMID: 16248292

Rick, S. I., Small, D. A., & Finkel, E. J. (2011). Fatal (fiscal) attraction: Spendthrifts and tightwads in marriage Journal of Marketing Research, XLVIII, 228-237

Schramm, D., Marshall, J., Harris, V., & Lee, T. (2005). After “I Do”: The Newlywed Transition Marriage & Family Review, 38 (1), 45-67 DOI: 10.1300/J002v38n01_05

Skogrand, L., Johnson, A., Horrocks, A., & DeFrain, J. (2010). Financial Management Practices of Couples with Great Marriages Journal of Family and Economic Issues, 32 (1), 27-35 DOI: 10.1007/s10834-010-9195-2

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