Relationships & money

How to deal with financial problems

David Goding discusses how conflicting pay cheques and attitudes towards money can cause friction in your relationship if you’re not careful.

How much money we make can be a delicate issue, particularly in a relationship where there is a sizeable difference in incomes. According to the Journal of Accountancy, money issues is the number one reason that couples argue, and tension over how the household spends, saves and pays the bills can result in deep divisions and blame.

“Money issues are inescapable,” says Hannah McQueen, financial consultant and author of The Perfect Balance. “Money changes things between people. Unaddressed money issues can cause stress and anxiety,” she says. “On the other hand, well considered and refined attitudes to money can create happiness and self-worth.”

Complicating matters are the changing roles in the household, growing expenses and an increasing drive to succeed, as well as differing ideas about what success means.

“It used to be so simple,” says Dr Jo Lamble, psychologist and author of Answers to everyday questions about relationships. “Men earned the money and women looked after the home. Nowadays, more and more women are becoming the major breadwinner or are at least contributing as much to the household finances as the guy.”
But working together with a common financial goal isn’t always easy.

Money personalities
We all view monetary gain differently – with different values, needs and drives, but, surprisingly, this is not something that many of us consider.

“Money is a powerful force in intimate relationships, because whether you have a lot of money or a little money, you never escape its reach,” says McQueen. “A couple could be aligned in their ambitions, world view, religion and basic life philosophy yet might not consider the alignment of their money attitudes.”

“Ironically, money is seldom discussed during the ‘getting to know you’ stage of a relationship, yet it is one of the most common reasons why relationships end,” she says.
McQueen says that most of us fall into the ‘saver’ or ‘spender’ personality categories.

“More often than not, the shopper almost inherently falls for the saver, neither probably aware of the other’s money tendencies at the time of falling in love,” McQueen says. “This creates a dynamic all in itself. One partner is trying to get ahead and the other is spending.”

A spender paired with another spender is fun at first, but can lead to financial disaster.

“It can be a dangerous combination as both tend to be in denial about their individual and combined levels of spending,” says McQueen.
Then there’s the saver/saver combo – sadly considered rare, it’s arguably the most comfortable and compatible match of all.

Financial infidelity
“Financial infidelity involves hiding substantial debt, which could be jeopardising the family home or credit rating,” says Dr Lamble. “The debts could be due to gambling or a soured business deal or secret credit cards. The deceit is usually due to the debtor’s fear of upsetting 
their partner.”

Most think they will find a way to repay the money before their partner finds out, but this hardly ever happens.
“This strategy usually backfires and the debt just increases,” says Dr Lamble. “Then when the partner finds out, not only is there the debt to repay, but the broken trust to be dealt with.”

Pooling your resources
Couples are bound together in so many different ways, but often still maintain separate bank accounts. Joining your finances establishes you as a financial team, helps to dissolve wage differences and minimises the chance of financial infidelity.

“I’m yet to meet a couple with separate accounts where there isn’t some degree of resentment and a sense of inequality,” says Dr Lamble.“When you have pooled funds, there is a sense of ‘our money’. If you give the job of managing the household finances to the person who earns less, then that person will understand what money is coming in and what is going out. They won’t need to be told what they can spend, because they will feel more in control of the situation.”

Money talk
The only way to truly understand where each other is at with regards to money and how it should be spent is to talk to each other about it. Many of us are reluctant to talk about money, fearing it to be either too boring and tedious a topic, or that just talking about it may lead to conflict. But left unaddressed, money can quickly become the elephant in the room.
“Sit down and create a household budget together,” says Dr Lamble. “Include plenty of flexibility for both of you. Have regular chats about money and how it’s being managed. If you work on a budget together, there shouldn’t be any sense of inequality.”

Always avoid bringing up finances in the heat of battle. Instead, discuss your money issues over a quiet coffee, with pen and paper in hand. Try not to get overwhelmed and be positive, think creatively and allow yourselves to get excited by joint goals.

“One of the advantages of being in a relationship is that you get to create new goals together,” says Dr Laura Berman, women’s health expert and author of The Book of Love.
“You might have to abandon your childhood dream of rock stardom, but you can replace that goal with a new one that you and your partner can work toward. Talk about things that you would both like to accomplish as a couple. Just having a conversation about your dreams and desires can be enough to motivate you to set a goal.”

Dividing and conquering
Equality is the ideal in every successful relationship – achieving it takes planning and consideration.

“Equality is so important in a relationship, but it doesn’t mean you both have to bring in the same amount of money or that you do equal amounts of housework,” says Dr Lamble.
Nevertheless, it’s essential that both parties make an effort to contribute to the running of the house, says Dr Berman.

“Plan for the week ahead so you both know what to expect,” she says. “Factor in any meetings, special occasions, or extra errands, and agree who will be responsible for what. You should both feel that you are making a fair contribution to the running of your home, having taken work and other commitments into account.”
When working out who should do what, go with each other’s strengths.

“If one of you is a born organiser, he or she should take charge of paying the bills,” says Dr Berman. “If one can’t tell bleach from detergent, the other should do the laundry. Whoever doesn’t do the laundry should take responsibility for the dishes or cleaning the bedroom. For chores you both detest, either take turns every other week or tackle an unpleasant task together as a team.”

Mixing business and pleasure

  • Plan to save money together but allow for a little spending indulgence on the side. “Make sure that you each have your own spending money each month,” says Dr Berman. “Don’t judge or criticise how you each choose to spend it. So, if you wouldn’t have spent $30 at the football game, if it makes your partner happy and he is still staying within budget, it’s fair.”
  • “Remember, having fun and enjoying small treats – even when on a tight budget – are still important.”
  • As well as saving for the serious stuff such as retirement or your children’s uni fees, put some money aside for something you’re really going to enjoy, sooner, rather than later. “Try putting all your loose change into a vacation account – or piggy bank – or even your pay cheque every so often,” says Dr Berman. “Before you know it, you and your partner could be on the beach in Mexico, all courtesy of the change you find lurking under the couch cushions.” 

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