It’s great to share a love of tennis or TV shows with your romantic partner. However, being on the same page regarding values and behavior around money can be crucial to maintaining a healthy and lasting relationship.
A 2017 Experian Credit and Divorce Survey of 500 people who have divorced within the last five years revealed that 59% said that finances played a part in their separation, and 53% stated they were not financially compatible.
Communication and understanding are key to financial compatibility. This article will help you determine if you are financially compatible with your partner and how you can make it stronger.
What is financial compatibility?
Financial compatibility doesn’t necessarily mean you earn the same amount or share the same financial habits. You can have your own money style, opinions, and roles.
Aja Evans is a New York City licensed financial counselor and financial therapist. “Financial compatibility really means do you feel comfortable with each other and how they handle their money, how you deal with it, and how you do so as a couple?” she says. It also involves understanding your partner’s money beliefs and how they use them, communicating openly and supporting their goals, whether they are individual or collective.
Experts recommend that you are open to discussing your financial history, as well as your goals, finances, and habits. If you don’t have the time, you should disclose how much you earn, how much debt you have, and what your credit scores are.
Have a conversation with your partner about questions such as “When did your parents have to make ends meet?” or “What were your thoughts on retirement?” Sade Soares is a licensed clinical psychologist in Honolulu and a certified financial therapist.
Talking about money can cause a lot of emotions. Evans and Soares recommend that you allow for emotions in your conversation, and not just facts and numbers. Your level of compatibility can be determined by being transparent.
Be aware of red flags
Financial incompatibility does not necessarily mean that there are minor differences in your relationship. While your partner might keep track of spending each day in a spreadsheet and you prefer to use a budgeting application a few times per year, it doesn’t necessarily mean that they are financially incompatible. That arrangement may work for you both. If your partner wants to be more involved but you’re not willing to compromise, it could become a problem.
You can set priorities and expectations so that you know which parts of your financial life can be negotiated and which are not.
Evans states that if you know you are interested in purchasing a house, planning a wedding, or making a vacation together, it is a sign that you are not aligned.
Relationship deal-breakers may pose a greater problem. Evans states that financial infidelity, which is hiding money, debt, or large purchases from a partner, can cause serious harm to a couple’s priorities and relationships.
Incompatibility can also be characterized by a lack in trust, avoidance of discussing money, frequent arguments, controlling or abusive actions (e.g. your partner trying to stop you from getting money) Evans suggests that you consider how financially secure and stable you feel with your partner when assessing your compatibility.
Create a solid foundation
You can build a strong financial relationship by having frequent and respectful conversations with your partner about money. This is especially important for couples that are married or share their finances. Even if you are just starting a relationship with someone, having conversations about your money goals and values early on can help you get started.
Soares states that the most important part of the communication is the open communication. Financial statuses can change at any time. “People move up in the socioeconomic ladder. People lose their jobs. There are many transitions around money that can occur. That conversation must be ongoing .”
Consider how often you think it would be beneficial to have money discussions together. Maybe monthly or annually. Don’t be afraid if you have difficulty resolving disputes or getting the conversation started, to seek professional help.
Soares states that collaborating with a financial counselor or therapist to map out your financial journey is a great way to see where you can make it work.