What is a financially successful relationship? If you ask ten different people, you quite possibly could get ten different answers. Financial success is a broad term, which could encompass several different metrics. For some, a financial successful relationship could be one where both parties agree on spending and saving habits. For others, they may define a financially successful relationship as one where there are no disagreements on finances.
Research indicates that 7 out of 10 Americans that are married or cohabitating with their partner have had financial disagreements. Of these disagreements, many resolved around needs vs. wants, spending priorities, and making purchases without discussing them first. These common issues can cause stress and havoc in a relationship! However, with good communication and financial planning as a couple, they’re certainly avoidable.
Regardless of what you believe makes up a financial successful relationship, know that financial success, in this context, does not refer to how much money you and your partner make. Instead, it refers to how you and your partner communicate and manage your finances.
Want to learn more about preparing for a financially successful relationship? Check out these tips below!
Start with a Conversation
The only way to get on the same page with your partner about finances is to have an open and honest conversation. Ideally, earlier on in the relationship is better. One thing you don’t want to do is wait until after you are already married to first discuss finances. A conversation with your partner about money should include several financial-related topics. These include debt accumulation, spending habits, saving habits, and goals for the future.
If you and your partner find you’ve got differing views, this is the best time to work through them. Both parties may need to compromise, finding a middle ground you can both comfortably live with. During this conversation, it’s a good time to talk about your background and how you both grew up. Was your family living check to check or did you have money for everything you needed? Understanding your partner’s background can help you understand why their financial attitudes might be what they are. The experiences and environment we grew up in are often a major factor in how we look at and handle money as adults.
Not only are honest and open conversations with your partner critical, but they also help you prepare for what you’re getting into. Nobody wants to be blindsided once they’re already married. Be honest about your financial history, and your partner will be too! If you’re engaged, this might also be a good time to discuss a prenuptial agreement.
Make Short and Long-Term Goals
As you join forces with your partner, create short and long-term goals together, as a team. Instead of viewing each person independently, consider these goals as a united force. After you and your partner have a realistic budget in place, you can create goals that matter to both of you.
When it comes to setting goals, it’s all about what you want to make a priority. Unless you’re extremely wealthy, chances are you’re not going to have money for everything. As such, creating goals as a team can help you both focus on what is most important. Maybe this is saving up money for a downpayment on a home. Or, perhaps you both value yearly vacations and want to set aside money for a travel fund.
Many couples wish to make reducing debt a priority. Today, a focus is student loan repayment. Every situation is entirely different. However, you and your partner can make both practical goals and wishful goals. Not only does creating goals together set you up for a financially successful relationship, but it helps to give you insight into the things that matter most to your partner.
Be Mindful of Child-Related Spending
No matter how you look at it, raising children is expensive! Whether you’ve got one or multiple, children have many needs and also, many wants. Of course, you and your partner should focus on ensuring all of your child’s needs are met. However, it’s easy to get caught up in wanting to give your child every one of their wants. Perhaps your child wants a brand new toy every week or a new video game that was just released. Overspending for your kids is one way to cause distrust between you and your partner.
Before making child-related purchases, have a conversation with your partner. This is something you both need to come up with a plan for as a team. Some parents set aside a certain amount of allowance money each week, in the budget. This is often a good solution to allow your child a designated amount of money to spend on non-necessity items. Or, some couples choose to make a rule that they need to talk about purchases beforehand. Whatever you and your partner decide, make sure it is a rule that you can both stick to. This can help your relationship over the long run.
Check out our blog on prenups and child support here!
Honesty is the Best Policy
You’re bound to have this phrase before! “Honesty is the best policy” is still a motto that remains applicable, especially when talking about relationship finances. Many arguments and financial disagreements begin rooted in dishonesty. To avoid this, remaining honest with your partner about spending habits is critical. Thought you’d pay cash and toss the receipt to hide your daily Starbucks runs from your partner? Think again. Lying is bound to come out at some point. Plus, think about how you would feel if you found out your partner was doing the same to you.
Be honest about the things that matter to you. Each person will have different ideas of what a “good use” of money is. Perhaps your partner likes spending money on car upgrades. Maybe you like to buy the newest makeup and clothes. Both parties deserve to use their hard-earned money on things that make them happy. However, lying about spending or overspending can lead to serious problems in your relationship.
Work with your partner to find ways for both of your interests to be included in the budget. Usually, a calm conversation is the best time to get your partner to be receptive to the idea. Lying is never the answer. Many couples also seek help from a financial planner to help them create a realistic budget. Budgeting can be difficult, especially for households with joint incomes and lots of expenses. Trusting a financial advisor can be a great way to set you and your partner up for financial success! In this meeting with your advisor, you’ll discuss spending and saving goals, as a team.
The Path to a Financially Successful Relationship
All in all, achieving and maintaining a financial successful relationship is not always easy. Like many components of a relationship, financial matters require attention and sacrifice to work. Both parties need to be willing to come together, as a team, to make financial decisions in the best interest of everyone. With proper nurturing and honest discussions, financially successful relationships are possible.
How Prenups Help
Prenups can assist in your financially successful relationship by setting the tone early on by having these discussions that relate to your future! See how HelloPrenup works to make this process as smooth as possible by creating a fast, valid, and affordable prenup from the comfort of your own home here!
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected].