Money conflict is one of the main reasons couples get divorced; 41% of Gen Xers and 29% of Boomers said their marriages ended due to disagreements about money.
To avoid future challenges, couples need to have those hard conversations and align on money matters early on in their relationship.
Partners should speak about finances because it is essential for building a healthy and stable relationship.
Financial issues are one of the leading causes of arguments and disagreements in relationships, which is why being open and honest about finances can help prevent these conflicts.
Even if it seems difficult to discuss finances, it is better to be upfront and truthful about your financial situation from the beginning. This can help to avoid misunderstandings, mistrust, and poor decision-making.
By working together with transparency and cooperation, partners can develop sound financial strategies that will benefit both of them in the long run. This can help them to avoid financial stress and conflict, and instead focus on building a healthy and happy relationship.
When you're in a committed relationship and planning a future together, it's crucial to have "the money conversation“, understand each other's money personalities and backgrounds, and get onto the same page with spending patterns, said Lee Hancox, head of channel and segment marketing at Sanlam.
Here are some of the biggest money marriage mistakes, according to Hancox – and how to overcome them:
What’s yours is mine
When couples commit, there’s often an assumption that assets will be shared. Couples should be upfront about their assets and how they will be treated, such as property, investments, bank accounts, and household expenses. Will you have separate bank accounts? How will you divide the household expenses?
“If a partner wants to keep finances separate, this does not mean they don’t trust you. It could make savvy business sense. It may be for tax purposes. Try to keep the emotion out of it. If you need an objective perspective, work with a financial planner you trust,” advised Hancox.
Reckless spending
Conflict can also result from personality conflicts related to money. Views of life, how we’re brought up, and previous relationships all impact behavioural patterns. Couples can support one another in discovering healthier ways to manage their money. It involves recognising the habits that are not beneficial to you or your relationship and deciding to actively change them, both separately and jointly.
Dirty little secrets
Be transparent about any debt. Assess the impact on your monthly cash flow and put a plan in place to repay it as quickly as possible. Acknowledge what caused the debt and, if needed, commit to changing the behaviours behind it.
“Relationship stress can be caused by financial secrets. If you’re hiding receipts – investments, assets, debts, or spending – from your partner, you need to ask yourself why.”
Share it like it is
Many people enter relationships with existing money responsibilities – either to their parents and extended families, or possibly maintenance to a previous partner and child(ren). Try to find ways to channel energy into finding solutions together to secure the best future for everyone.
“Determine the needs of all your dependants and then look at how to finance these. Avoid using your retirement savings to do this.”
Do you want kids?
Children change everything, so it is important to be on the same page. Discuss how many children you want, and what kind of lifestyle and education you aspire to give them.
Do you both want to continue working or does one partner prefer to take a career break? How will you save for schooling? Public or private schools? What about tertiary education? A financial planner can help you come up with a viable plan.
Be future-focused
Future-oriented thinking can improve a couple's communication. This calls for early joint planning and preparation for retirement.
Are you both contributing towards it? If one partner passes away, is the other partner provided for, in terms of estate planning? If you have children, are their education and living expenses provided for? What if you both pass away at the same time?
“Disney might not show pre-nups, but most happily-ever-after really should involve ante nuptial contracts. It’s important to discuss how you want to commit to one another, whether this means marrying in or out of the community of property.If you're feeling overwhelmed, get professional advice.”
“Financial planners are there to offer you advice that changes your life and relationship,” Hancox said.