Few things are more polarizing in a relationship than money. More than half of unhappily married couples, in fact, say that financial problems are a main cause of their marital woes, according to a recent survey by Money Management International.
And the economic downturn hasn’t helped. In a recent online poll by the National Foundation for Credit Counseling, more than one in four respondents visiting the foundation’s website said that the financial strain associated with the Great Recession has put stress on their married life.
A couple’s lack of money, however, isn’t necessarily the primary cause of money problems in their relationship, say experts. Even when a couple has plenty of cash, differences in the way the partners view and handle the money can lead to serious problems down the road. As a result, a couple’s ability to negotiate these differences often plays a huge role in the health and happiness of their relationship.
“As long as couples learn to communicate with each other, there really is no situation that they can’t work through,” says Scott and Bethany Palmer,the love and financial advice team behind the Money Couple. “But couples must understand each others’ personalities and habits when it comes to money; otherwise they won’t be able to work their way through problems.”
Unfortunately, most couples tend to unconsciously adopt money habits that sabotage their relationship. Here are three financial habits that often result in relationship issues — and how to deal with them:
Bad love and money habit #1: Trying to make one size fit all.
People often bring to relationships starkly different values and attitudes about money — as well as personal financial habits that they have practiced for years. The sooner you both realize this, the better off you are. For example, some people are lifelong savers, and they relish saving for long-term goals and avoiding credit card balances. Others are spenders. They prefer to use their income to enjoy life here and now, and they easily get into credit card debt. Similarly, some people are major financial risk-takers, while others have a panic attack just at the thought of taking out a loan.
How to avoid this habit: There are many approaches to dealing with money, and there is no one right way to handle finances, so accept that you are different. Understand that for each of you, your feelings and habits around money are created by a lifetime of experiences. Even though you may believe that your way is the only right way, aim to compromise and marry each of your money styles. Don’t just expect your partner to adopt your personal style. Build on areas of common ground, and minimize the differences.
Bad love and money habit #2: Avoiding difficult issues.
Many couples develop an unconscious habit of avoiding confrontation about money and skirt difficult issues that they know will spark controversy. Unfortunately, the more a problem is swept under the rug, the greater the explosion will be when it eventually does surface. And surface it will.
How to avoid this habit: A heated argument is rarely the best way to resolve difficult issues. Instead, set aside a time to talk through your finances and learn about each others’ goals and values.
If there are certain money issues that continue to create tension, don’t talk about the issue. Instead try to understand the differences in your partner’s attitude toward the issue in question. You will often find that a difference in values and perspective between you and your partner is behind the chronic tension.
“Decide upfront that you’re not going to point a finger or blame each other,” says Gail Cunningham, Vice President for Public Relations at the National Foundation of Credit Counseling. “Instead, have a positive conversation about how to get to a better financial place together.”
When couples do have such conversations, they often find that they both learn something valuable. For example, Valerie resented that her second husband Ted spent so much money on travel to visit his friends and adult kids and that he insisted they go on an overseas vacation each year. The couple could afford it; but Valerie preferred to sock the money away in a retirement account.
When Valerie and Ted finally talked through the issue, Ted explained that relationships and experiences were much more important to him than money in the bank. This made Valerie realize that although her goal of saving money was valid, she also could benefit from embracing Ted’s values. In fact, she needed to spend more time (and money) smelling the roses—even if it meant putting a little less money aside each year.
Bad love and money habit #3: Giving one person control over all financial decisions
There is usually one person in the relationship that takes charge of paying bills and handling taxes and other paperwork. Unfortunately, in some cases, the person handling the paperwork also ends up taking charge of all financial matters — including making financial decisions.
Although it’s nice for the other spouse not to have to worry about finances, there are considerable drawbacks. The person controlling the finances could take on credit card debt without the other person’s knowledge, or might even manipulate things to his or her advantage if the relationship gets rocky.
But even short of that, there are important benefits when both parties are involved in the planning and decision-making: It typically leads to better financial decisions for both.
“Money is the one universal overlay of everything we do in a relationship,” says Cunningham,. “If you’re not talking about it and making joint decisions about it, how can you get close? Making financial decisions together is a key part of building a healthy relationship.”
How to avoid this habit: Cunningham recommends setting up a time once a month or every two to three months to go over finances. Have an honest conversation about what’s going on, where you stand and what you might need to adjust. It will help you avoid unpleasant surprises down the road and ensure that things are developing in line with both of your long-term goals.