Have you ever wondered about the most significant areas of incompatibility among couples? One of the top landmines of incompatibility is finances. Maybe your significant other spends like mad, while you watch every penny. Or perhaps your partner wants to save for a house and you want see no problem with renting.
A difference between spending habits and short- and long-term goals can cause significant disagreements in relationships. Money is an indicator of worth to many people. If one person makes significantly more than the other, it might create psychological stress. We are taught attitudes about money from our families. What one family sees as prudent budgeting, another may seem as needless self-denial.
What if you and your partner aren’t financially compatible? Here’s four tips for determining your compatibility and ways to work with it if you’re not.
1. Watch How the Other Person Spends
While bank balances themselves might be secret, how people approach finances can’t be entirely hidden. It will manifest itself in many places. When you start to date a new person, simply notice how they seem to spend and save. Is their apartment stuffed with expensive items or is it minimalist? Do they always want to go to the most expensive restaurant, or are they eager to cook in? Always wanting to spend or go out might be a sign that the person is a big spender and not a saver. How does that accord with your financial personality?
Also, pay attention to responses about any discussion of financial issues. Does the person you’re seeing react strongly to news stories on rising amounts of student loans? Have strong feelings about government spending? Read popular blogs on minimalist living or tiny homes? Discuss parental spending habits, or being without as a kid? Pay attention to factors indicative of feelings about money, spending and saving.
2. Determine Your Compatibility Early On
Don’t wait until you’ve moved in together to realize one partner can’t balance a checkbook or one buys shoes every other week, whether the money is there or not. Finances can be a landmine filled with compatibility issues, so take notice about how you each approach mutual finances early on in the relationship.
Going on a date is a good example. You’ve both ordered something, and a bill needs to be paid. It can be a leading indicator of whether or not you’re a financially compatible couple. It doesn’t matter whether the approach was traditionalist and the guy paid, or both of you believe in splitting the cost equally. How did you approach paying? Was the approach compatible or incompatible? Did you feel any compromise was appropriate? Fair and reasonable?
What matters is whether you each feel whatever happened is equitable for both of you in the end. It also matters if you both feel comfortable enough to discuss it.
3. Don’t Shy Away From Discussing Finances
Financial incompatibility becomes more important once you become seriously committed. If you live together and are thinking about marriage, a house and children, it’s crucial to have a conversation about shared goals and how to achieve them. If you want a house, how will you save? Do you both want children? If so, do you agree about how to budget for a family? What are your views on credit cards and budgets?
The discussion needs to define how you each approach spending and saving. They need to be compatible. Note that “compatible” doesn’t mean “identical.” Two people may have similar views about spending, but that could mean each is loaded with debt but completely happy about the purchases. They may be unwilling to give up spending, which could be a disaster for long-term goals. A couple where one is a spender and one a saver might actually be more compatible in defining and meeting goals, as long as they understand each other’s tendencies and are comfortable with them.
4. Work Together
After a suitable discussion, you’ll gain an idea of how to work together. Do both of you love to buy and spend? Sit down and create a reasonable budget that allows you both some favorites but doesn’t put all your disposable income toward credit card repayments. Is one a spender and one a saver? Make sure each person is comfortable, with a plan for spending and saving. Are both of you savers? Make sure your saving is goal oriented. Buy treats every so often, so you’re not constantly without any fun items.
Discuss whether you are comfortable merging your money or keeping separate accounts. Merging can work well if both people are willing to approach accounts the same way, but if your discussion indicates that you share long-term savings goals but one or both of you love to spend, separate accounts for savings and spending might be in order. Separate accounts can in essence plan for financial incompatibility, but make sure it doesn’t sink the ship.
Financial compatibility is made, not born. These four tips will help you to become more conscious about areas of potential compatibility and establish a solid ground for a healthy financial relationship.