As the saying goes, opposites attract. How do romantic partners connect when they are blending their financial lives and looking at managing their finances together until death do us part? It can get tricky. But if you and your partner share similar values and are money compatible – making, managing, and investing money is just a little easier.
Money compatibility is defined as having similar financial goals and values, and an ability to discuss and resolve financial differences. Money compatibility does not mean that you both have the same money mindset, or that you always agree about how to use your wealth. But it does require you to be like-minded when it comes to your short-term and long-term financial vision.
It is unfortunate that most couples don’t find out if they are financially compatible until they are living together or married. The exception to this rule tends to be people who are in their second marriages, as they generally have experienced the pain that comes with being in a relationship where money is a source of conflict. So, whether you are married, living together, or dating, it is important to find out if you and your partner are financially well matched. If you are money-compatible, then your financial life won’t be perfect but it will be less rocky. If you are not well suited for each other, you have two options. If you are still dating, you can call it quits. Or, if you are in a committed relationship you can roll up your sleeves and work on this part of your relationship.
Sharon and Warren are a good example of a money-compatible couple. Sharon is very conservative in her spending and rarely splurges on dining out or clothes. While Warren enjoys fine wine and going out with his friends, he too likes being thrifty. He clips coupons, looks for discounts and sales, and does a good job of keeping to the budget that Sharon has established for the family. They both love to travel and use the money they save on day-to-day expenses to take one or two exotic vacations a year. Of course, they financially disagree from time to time, but for the most part, they are very well suited.
Conversely, David and Dee are a good example of a money-incompatible couple. David works for a start-up technology company and likes to make and spend a lot of money. He works long hours at the office and believes that he deserves to be rewarded. He considers his vintage car collection his reward for being a good provider for his family. His wife, Dee, sees things differently. She resents David’s long hours at work and thinks the car collection is a waste of money. Dee likes to hike, knit, and read. She rarely goes shopping for herself and is embarrassed by her husband’s showy lifestyle. Their values are just very different. As a result, they fight about money often and are considering separation.
As these couples exemplify, shared values are important when it comes to financial compatibility. Whether you realize it or not, how you spend and save money often comes down to what you think is important in life — in other words, what you value. So take some time to figure out what is important to each of you and where you values overlap? Then focus on understanding your monetary decision through the lens of shared ideals.
In addition to identifying your values, consider following these three practices to strengthen your relationship with money and each other:
- Go on money dates. Research shows that romantic partners who talk regularly about finance report a higher level of satisfaction in their relationship. Make time each month to go on a money date by spending twenty to thirty minutes discussing your finances. If this is new practice, make sure to focus on your own ideas and thoughts, and avoid turning this into a half an hour of the blame game.
- Capitalize on each other’s financial strengths. Don’t get caught up in what your partner is doing wrong or criticizing them for their financial values and behaviors. Instead, take time to identify, discuss, and capitalize on each other strengths. In the example above, Sharon is good at budgeting and Warren is skilled at planning vacations that fit with their shared desire to be thrifty. Sharon could spend time criticizing Warren for his love of fine wine but it is much more productive to focus on how they can both spend wisely when it matters.
- Focus on progress, not perfection. Engaging in a money talk is not a one-time event. It is an ongoing dialogue for romantic partners. Therefore, celebrate financial victories, like paying down your credit card bill, or fully funding your retirement for the year. Money will always ebb and flow with life’s ups and downs, so keep your eye on making shared progress and let go of any need for perfection.
When did you and your partner start discussing money as a couple? If you had to do it again, would you start the dialogue sooner?
Kathleen Burns Kingsbury is a wealth psychology expert, founder of KBK Wealth Connection, host of the Breaking Money Silence™ podcast, and the author of several books including How to Give Financial Advice to Women and How to Give Financial Advice to Couples. Her next book, Breaking Money Silence: Shatter Money Taboos by Helping Your Clients Openly Discuss Their Finances was published September 2017. For more information, visit KBK Wealth Connection.