Romance and finance

Romance and finance

What has finance got to do with romance? The answer is an awful lot. A longitudinal study of 4,500 couples carried out by Sonya Britt, a Kansas State University researcher, which was published in Family Relations Journal in 2012, indicated that arguing about money is the top predictor of divorce in American families.  The research indicated that couples who argued about money early in their relationships – regardless of their income, debt or net worth – were at a greater risk for divorce. It comes as no surprise then that finances consistently figure in the top five reasons for divorce wherever such statistics are available. There are three major sources of financial conflict to look out for in your relationship:

Money management matters

One of the biggest sources of financial conflict in relationships is differing perspectives towards how to manage money. As surely as opposites attract, you can almost be certain that you will find yourself in a relationship or married to someone who is somewhat different from you in their approach to handling money. How will you handle those differences?

There are two extremes when it comes to people’s attitudes to money management; people who never consciously address the place of money in their lives by taking an active role in shaping their own financial destinies, and others who never, ever stop thinking and worrying about money, no matter how much of it they have. Somewhere in between we need to be able to find a healthy, balanced attitude to money management that comes from a realisation that it makes a wonderful servant but a tyrannical master.

Understand your different spending patterns

Spending patterns are another area of potential conflict in a relationship. If a strict budgeter marries a happy-go-lucky spender, sparks are bound to fly. The same applies when someone who is incredibly generous and will give to anyone who approaches them with a sob story hooks up to a partner who would outclass Ebenezer Scrooge in the ranks of tight-fistedness. Most differences in partners’ spending patterns are not that extreme but there is no doubt that if you do not understand how your partner spends money, you might be in for some rude surprises in the future.

Our spending patterns can often be a reflection of our values. When we do not understand the value that our partner places on money, we risk being seen as the hindrance standing between them and the goal which they are convinced will bring them happiness. ‘We need to save that money for a car rather than spending it on a holiday’, can be interpreted to mean ‘I care more about driving a dream car tomorrow than building memories with you today’, unless a compromise position is negotiated sensitively. Differences like these will need to be reconciled as sometimes there is no right or wrong answer as to whose desire is most legitimate.

Joint accounts or not?

A further area of potential conflict is our individual expectations about how money will be handled in our relationship. Again there is no right or wrong answer to this. Some couples swear by joint accounts; others have a joint account for major purchases as well as individual accounts; yet others have individual accounts but distribute the financial responsibility so everyone knows who is responsible for what. In my view, the principle of oneness in marital finances is more important than the practice of putting it all in one place.

I have always joked with my husband that everything he has is mine and everything I have is also mine! In practice though, while we maintain separate accounts for day to day spending and a dedicated account for bills, there are no boundaries between my money and his. I have access to his bank account and he has access to mine. We both know what comes in and what goes out. It is all one. You are not really one until your money has become one but whether that translates into joint or individual accounts is less relevant. Do whatever works for your particular circumstances.

P.S. Do you think finance matters when you are in love? Share your views on Facebook and Twitter.

Romance and finance
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