A few weeks ago, I was in a financial conversation with a married person who reluctantly admitted that he and his partner have chosen to keep separate bank accounts. It was clear in the way he spoke that he felt he and his wife were doing something wrong -- as if keeping their money separate would ruin their marriage, even though it was a system they had found to work really well for them.
Through my work, I’ve met happy couples who have held their money jointly, happy couples who have held their money separately, and happy couples who have done a hybrid of both. I have also met unhappy couples who have followed each of those paths. The system isn’t what determines the happiness of the relationship, it’s the communication and transparency that really matter, no matter what system you choose.
But even with the right system, there are some financial issues that really can ruin a relationship. Let’s start with the easiest to overcome and work our way to the most problematic:
5. Overextending Budgets: When you are living beyond your means. Maybe you bought too much house or too much car and you find yourself using credit cards to get you by from month to month, or maybe you’re not sure exactly how you’ve gotten caught in a cycle that’s leaving you both stressed and anxious. If you find yourself in this situation, take some time to take a look at your whole financial picture. A financial audit can be a really helpful starting point. Try your best to approach this as an objective observer; resist the urge to nitpick or play the blame game. While it may just be one expensive item (like a house), it’s more likely there are lots of small and large overspending areas that are contributing to the issue.
Tip: Once you get a grasp of the situation, you may be tempted to adopt a spartan lifestyle. The odds of your success with that approach are very low. Instead, ask: What’s important to us that we continue doing? What can we cut back on or eliminate? It may be really important to you both that you continue to go on one family vacation each year. Keep that in the budget and ask yourself: What might we be willing to let go of to make this happen? Maybe you are willing to eat out (or have takeout) only once a month so you can save the rest towards vacation.
4. Different Money Personalities: When you and your partner approach money in not-always-obviously-compatible ways. As I’ve often said on this blog, I believe different money personalities can be a gift, rather than a curse. A balanced financial life includes giving, saving, spending, and acquiring money. It’s important to begin with the mutual agreement that there is no one “right” money personality. Even the classic spender/saver combination can be a winning one for you both if you learn how to respect each other’s strengths and fill in each other’s blind spots.
Tip: If you find money personalities are really getting in the way of your financial progress, one solution may be to consider having yours, mine, and ours money. If you currently have all joint accounts, begin by setting some separate money aside that either one of you can spend (or save or give) as you wish, no questions asked. A little freedom can go a long way to giving each of you the independence you need to focus on your individual needs and goals.
3. Avoidance: When you only talk about money when there’s a problem. This means you aren’t making a plan for your money when things are going right; instead, you’re waiting until things are in the gutter to make any changes, and often that’s much too late. This practice is also likely to increase financial anxiety, especially for the less financially involved partner. To fix this bad habit, make your conversation about money planful, proactive, and preventive. I recommend couples make a “money date” to talk about their finances once a month. Curious about how that works? Check out one of my free money date night templates.
Tip: After avoiding the money conversation for so long it can be pretty challenging to get it started. Try one of my favorite icebreaker questions when you’re washing dishes, out on a winter walk, or need a quick break from Netflix binge-watching. These small questions can help normalize talking about money.
2. Power Play: When one spouse dictates the financial plan for the couple, giving their partner little to no say in the matter. This might occur when one partner earns more than the other, when one partner has a paid job and the other does not, or when one partner comes from a family with money and the other does not. When there is an unchecked imbalance of power in the relationship, it’s easy for power plays to take place -- even to the point of financial abuse. In this situation, a therapist, particularly a financial therapist, can be very helpful. If you are just noticing small elements of power play (like a partner complaining about or dictating some of your spending habits), this is a good time to define together what money belongs to each of you separately and to the two of you collectively. If it’s collective money, no partner can be the sole dictator. One way to keep power plays at bay is to keep some money separately that you each have control over individually.
Tip: If you are in any of the situations I listed above or another situation that’s fertile ground for a power play, get ahead of it by talking about it before any issues arise. Use this blog article as a guide.
1. Financial Infidelity: When a partner hides money, debt, assets, or bad financial habits (like gambling) from their partner. If you are going to become financially involved with your partner by co-signing a loan, moving in together, or getting married, it’s imperative that you be honest about your financial past and present, even the unsavory bits. Again, this is a situation where a financial therapist can be really helpful. If you are hiding part of your finances from your partner, I encourage you to come clean. This gives you the opportunity to frame the narrative much better than if your partner finds out on their own. If you believe your partner is hiding something from you, if you can, try to approach the situation with empathy, compassion, and patience.
Tip: If you have been hiding something financially, this blog article on dealing with financial guilt offers suggestions to help you come clean about past transgressions and start on the road to forgiving yourself. If your partner has committed financial infidelity, this can also help you on the journey toward healing.