How To Resolve A Financial Disagreement With Your Partner
Couple looking to get on the same page about their finances.
Working through conflict and disagreements is a big part of financial planning for couples. Financial conflicts between you and your significant other can go one of a few ways:
You come together and decide on a compromise that makes both parties happy.
One person concedes and is happy with going with the other’s view.
One person concedes and is resentful of going with the other’s view.
You end up in a complete gridlock and can’t move forward on the issue.
From a professional standpoint, I’d love if the first scenario was always what I saw. However, from personal experience, I know the last three are all too common. I enjoy seeing every decision-maker in a household involved with their financial plan. This is not only from an empowerment perspective but also from seeing a fair amount of death and divorce where the parties left behind are devastated and overwhelmed by their financial situations. This is a discussion of three steps that couples can take to work through financial disagreements and move toward financial security.
Understanding Ingrained Beliefs About Money
How people were raised tends to influence how they think about money. If you grew up in a household where there was not a lot of extra income and every single dollar had to be accounted for, you may be a strict budgeter in your adult life. If you were a first-generation college graduate and hold a great sense of pride from figuring out paying for college on your own, you may want a child to have the same level of accountability when they go to college. If your dad worked at the same company for 30 years and retired on a generous company pension, you may not worry about having enough money in retirement. If you grew up in a multigenerational household where the younger family members took care of aging loved ones, you may not see a need to plan for end-of-life care. You may have a rich uncle you admire who invested in a booming company’s stock early, and you believe the best investing strategy is to bet everything on one company you really believe in. All these baseline assumptions and feelings about money may be true to you.
Life gets tricky when you decide to invite someone else into your finances. It is almost guaranteed that your partner does not have 100% of the same beliefs about money as you because they had different influences and upbringings. Understanding and accepting your partner’s own beliefs about money is an important first step in resolving financial disagreements. Approaching them with empathy and compassion is essential.
Example Of A Financial Disagreement
They say opposites attract, right? This can apply to everything from taste in ice cream to how you keep a budget. I am a very regimented person who tracks everything I spend and am careful about big purchases. I tend to attract people who have a relaxed budget concept and like the finer things in life. I’m not alone in this. Most couples I know naturally have some differing spending patterns.
In this instance, both parties need to start by understanding each other’s money beliefs and why they have the priorities they do. Maybe the regimented budgeter grew up in a family worried about money and has fears about not having enough to support themselves now or in the future. And maybe the spender saw a loved one sock away money their whole life only to die at the time the person was meant to retire and reap the rewards of everything saved. Once couples understand each other’s ingrained beliefs, they can tackle the core issues that cause the money friction.
Next, both partners need to come together and find a budget they can agree on. This can be uncomfortable for the regimented person, as it adds in what is seen as unnecessary spending. However, speaking from experience, some items can add a lot of living.
I once lived in an apartment in San Francisco that I refused to decorate because I knew I’d eventually move. The result was the place felt bleak, and I didn’t have any connection to it. Living with a spender has encouraged me to get art while traveling and think critically about design elements I’d like in my life. This inspired me to embrace the now.
If the spender completely bends to the budgeter, they may hold negative or detached feelings toward things in their life. It could be the smaller house in the worse neighborhood or skipping the vacation needed for a reset. It can have a negative impact on the individual as well as the relationship.
If the budgeter completely bends to the spender, they can end up with the scenario of getting buried in credit card debt, living beyond their means, and never meeting their financial goals.
If the budgeter and the spender end up in a complete gridlock, it can lead to living entirely separate financial lives and never coming together on your ultimate shared financial goals. This can include one person being entirely responsible for education funding, home purchase goals, retirement funding and more. I’ve seen many scenarios where this leads to resentment and ultimately, strained or failed relationships.
You can apply this exercise to many of your own financial disagreements.
Conclusion
Because everyone is unique, the potential for financial disagreements can arise when you join your life with someone else. Implementing strategies to resolve financial conflicts, such as fostering open communication, providing empathy about ingrained money beliefs, and compromising on a solution that works for both parties can ultimately lead to financial security.
This informational and educational article does not offer or constitute, and should not be relied upon, as tax, financial, or student loan advice. Your unique needs, goals and circumstances require the individualized attention of your own tax, legal, and other professionals whose advice and services will prevail over any information provided in this article. Equitable Advisors, LLC and its associates and affiliates do not provide tax or legal advice or services. Equitable Advisors, LLC (Equitable Financial Advisors in MI and TN) and its affiliates do not endorse, approve or make any representations as to the accuracy, completeness or appropriateness of any part of any content linked to from this article.
Cicely Jones (CA Insurance Lic. #:0K81625) offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN) and offers annuity and insurance products through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC). Financial Professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. Any compensation that Ms. Jones may receive for the publication of this article is earned separate from, and entirely outside of her capacities with, Equitable Advisors, LLC and Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC). AGE-5794094.1(08/23)(exp.08/25)
