Financial matters might sound like a very cold and calculated topic, but anyone in a long-term relationship knows that money conversations (read arguments) are often deeply personal and emotionally charged.
So to continue our exploration of money and emotions we asked Kelley Long, a Personal Finance Specialist and a financial planner with financial education provider Financial Finesse to share her best strategies for navigating some of the most common fight-starters that couples face.
1. Making large purchases without consulting your partner
Emotions triggered: Frustration and anger
Kelley’s solution: Find common ground and then keep your word
This is one of the most common fight starters, but luckily it’s also an easy one to fix! I’m all about agreements in relationships, so if something is happening in your relationship that you don’t like then you have to change your agreement.
This is a perfect example because first a couple needs to agree on what constitutes a “large” purchase. If one partner thinks it’s anything over $50 bucks and the other thinks it’s anything over $500, you can’t just leave it at that and keep fighting about it.
You have to come to a compromise. So maybe you meet in the middle or maybe instead of talking dollars you just talk conceptually. As in, “Don’t go out and buy something like a new laptop without talking to me first.”
Once you set out an agreement, you then have to accept that your partner’s anger would be completely justified if you break it. Breaking this agreement may even be cause for couple’s counseling, because if you can’t stay on the same page on this issue then I think that hints at something bigger that’s happening in your relationship.
2. One partner spends more on luxury or “fun” purchases than the other
Emotions triggered: Resentment and jealousy
Kelley’s solution: There’s a time to be fair and a time to be equal!
I think this is actually pretty common because opposites (spenders and savers) tend to attract. I know in my marriage we handle this particular issue by approaching it from a fair but not an equal standpoint.
We start by determining how to split up our household expenses in a way that is fair to both of us. Because remember, if your incomes are unequal then equal won’t be fair. So to adjust for our unequal incomes we each contribute a proportionate amount towards our mutual goals and expenses.
For example, the partner who is making more money could contribute more to the couple’s retirement savings or mortgage payments than the one who is making less money. This will ensure that the amount of “fun” money that each partner has leftover will be equal.
And I do recommend that couples have separate checking accounts for their fun purchases. I think you should be able buy what you want without any commentary!
3. Keeping a secret bank account or credit card or hiding purchases
Emotions triggered: Distrust and paranoia
Kelley’s solution: Come clean immediately and repair the situation
Hiding purchases from your partner is like a death nail to a relationship. As far as I’m concerned keeping secret accounts or hiding purchases is no different than going on a date with somebody else. It’s cheating. It’s financial infidelity.
Doing things like sneaking clothes into your closet and cutting off the tags isn’t funny. This type of activity breeds distrust in a relationship, so that’s why I say there should be zero tolerance.
If you are in a cycle of hiding purchases from your partner or you have hidden debt that you’ve accumulated, you have to confess and ask for help to get it under control.
4. Leaving all the financial planning and bill-paying to your partner
Emotions triggered: Anxiety and insecurity
Kelley’s solution: Divide and conquer but always stay informed
This is really dangerous on so many levels. The major risk is that if something were to happen to the partner who handles the finances, the other would be left in the lurch. So I think it’s important for everyone to have a sense of financial autonomy in their relationship.
This autonomy requires at least being aware of what bills are being paid, how much they are, and how to access them. Both partners should also have access to all the bank accounts and make the effort to check in on them regularly.
That said, I’m all for division of labour in a relationship! It’s perfectly fine for one person to take responsibility for paying the bills as long as they are updating their partner at least once a month. It’s just like if one parent always drops the kids off at school. At the end of the day that spouse reports back what they heard from the teacher. It’s the same idea.
5. Making investments that your partner finds too risky
Emotions triggered: Fear and frustration
Kelley’s solution: A separate pot but with veto power
I’ve actually seen this a few times and there is a compromise that seems to work well. First of all, the majority of the couple’s investments need to be of a risk level that both partners are comfortable with.
BUT I do think the risky partner should have a pot of money that they can use to go for homeruns. Because who knows, maybe they’ll hit one! But obviously the risk taker’s pot should only contain money the couple can afford to lose.
One really successful example I’ve seen is between my colleague and her husband. He’s agreed to always run his risky investments by her first and she’s agreed to only veto them if it’s for a practical reason.
For instance, in one case he was going to make a real estate investment but she reminded him that they were going to need that money soon to pay for their daughter’s next semester.
You also need to have a healthy definition of risk to make sure you’re not being too conservative. If you’re a 30 year-old who is afraid of the stock market and won’t let your spouse invest your 401ks in stocks then you may benefit from a second opinion from an unbiased financial planner.