It’s not always easy to find love (or even like). A good romantic match might get you through the early stages of a relationship, but if your money personalities aren’t a match, you could end up stressing about every little thing. When it comes to money, there are some things you might agree on. Overspending and financial secrecy, for example, were found to be the top financial deal breakers for couples in every state, according to one survey.
However, you might not always be on the same page financially with your partner- and that’s ok, as long as you are able to find a middle ground that works for you both. Finding ways to reconcile your opposing views on money may be crucial to your relationship’s success.
What’s your money personality?
Everyone has their own set of money values, behaviors, and experiences, which begin in childhood and continue into adulthood. Your internal scripts and attitudes around money are shaped by these mutual interactions and values. While growing up, we all had money flashpoints, whether positive, negative, or neutral, and these experiences have formed your overall ‘money personality.’ As a result, how you handle things like budgeting, saving, credit, and debt is heavily influenced by these experiences.
Some of the most popular money personality types are as follows:
Spenders love splurging on themselves as well as others. They appear to do so haphazardly and impulsively, but don’t stress out about the balance in their bank account until it’s too late. They live with a true “YOLO” mindset about finances.
Savers are frugal about their finances and believe in cutting expenses and putting money away for a rainy day. Money hoarders are an extreme subset of this group, and are serious savers who are very frugal and live to save.
Amassers are people who amass a lot of things, in various areas of their lives. They enjoy saving money, but they also see the larger picture, such as long-term wealth and financial security. They prefer to invest over keeping money in a savings account.
Money avoiders take the concept of “hands-off” to a whole new level. They don’t want to think about money, discuss it, or be involved in its management. They don’t overspend the same way the Spenders do, but they are not as frugal as the Savers, either.
Can you see yourself or your significant other on the list? If that’s the case, you’ve already accomplished the difficult task of finding a possible financial mismatch. Once you find the ‘problem area,’ you can work to find middle ground with your future spouse.
For example: When it comes to talking about or handling money, does your fiancé avoid it, while you are very hands-on? Who is managing the investments? These various financial personalities have a direct impact on the division of labor and how successful couples handle their finances. Oftentimes there will be one spouse who is more financially astute, who is responsible for paying bills and overseeing the family’s financial strategy. If you have a money personality imbalance, you’ll need to devise a scheme that allows your various opinions about your collective moolah to coexist in peace.
The benefits and drawbacks of marrying your financial polar opposite
Being in a relationship with someone who does not share your perspective on money has its benefits and drawbacks. On the plus side, dating (or marrying) someone with a money personality opposite yours will provide you with insight into a particular financial viewpoint. Dating a saver, for example, if you’re the spender in the relationship, might introduce you to positive money values and behaviors that you might not have encountered growing up. You might also be the one to set a good financial example for your spender partner if you’re the saver.
Of course, the drawback is that money will become a point of contention between you and your partner. For example, you may both have financial deal breakers that make the relationship a no-go. This may include things such as:
- Having a bad credit rating
- Lying or concealing money
- Reluctance to talk about money
If you’re an Amasser who’s concerned about financial stability and growing your net worth, for example, you might be irritated by a partner or spouse who’s an Avoider who ignores money.
You can still have a happy relationship if you don’t agree 100 percent on finances, but you will have to work a little harder to get there. With that in mind, here are some suggestions for handling your finances as a couple, even though your financial personalities differ.
- Recognize and accept the differences. Although you don’t have to support bad financial conduct, such as keeping money hidden, you must acknowledge that you and your partner are two different people with two different perspectives on money.
- Keep in touch. When it comes to finances, communication is critical to making a relationship work. Both of you should feel comfortable discussing your feelings about money and how to handle it in your relationship. Talking about money on a daily basis will help you understand where the other person is coming from and what motivates their financial values.
- Be considerate of your partner’s financial interests and ambitions. Even when money isn’t an issue, respect is important in every relationship. Instead of pointing fingers or lecturing, being polite will help keep the channels of communication open so you can continue working together to improve your financial situation.
- Create boundaries. When you don’t treat money in the same way, you’ll need some ground rules for handling it. Instead of mingling money, you might decide to keep your bank accounts separate. Alternatively, you could open a joint account to which you both contribute an agreed-upon sum to cover your mutual expenses. Having limits that you and your partner are both happy with will help you avoid financial squabbles.
- Maintain an even playing field. If you’re splitting expenses with your partner, make sure you’re dividing them equally. If one of you earns considerably more money, for example, instead of dividing expenditures 50/50, you might agree to divide them based on your respective earnings.
If you and your partner are polar opposites when it comes to finances, you should keep things friendly. A happy couple learns to navigate their differences with the assistance of professionals if necessary, and lets go of trying to change the other.
If you’re a spender…
Set limitations if you’re a spender. Before you buy something, give yourself a 24-hour cooling-off period to allow a more rational decision. Examine the feelings at the time of purchase if you’ve ever splurged. Did the splurge make you happy, even though it was just for a short time? Why do you waste money on someone else if you’re a giver? If you’re doing it to make yourself feel better or to feel liked, then learn to just say “no” to spending on family and friends.
Next, start saving for an emergency fund and stop making impulse purchases using your credit card. Look at the debt-paying options in the long run, and then make sure to pay your full balance off each month.
If you’re a saver…
You are the polar opposite of the spender, also known as a “hoarder.” You are a thrifty shopper who enjoys seeking bargains. You most likely have an emergency fund, retirement savings, and a financial buffer in case anything unexpected happens. You may be hesitant to discuss money with others.
If you’re a saver, the good news is that you’re probably still frugal and have good financial habits. But, allow yourself to enjoy what money can buy once in a while.
If you’re an Amasser…
You, like the saver, are cautious with your money. Wealth can provide a sense of protection, particularly if you didn’t grow up with a lot of money. You may also be overly concerned with financial choices that include investment, such as purchasing a home or living off your retirement savings.
If you’re looking for stability, learning to set financial goals to alleviate the stress that comes with major decisions. Recognize that there will be a thousand options, and that if you match your choices with your financial objectives, the decision you make will be the right one for you at that time.
If you’re the avoider…
When was the last time you handled the stack of bills on the kitchen counter? You don’t want to think about money, or you know you should be doing something about it but are too overwhelmed to start. You don’t have an emergency fund and haven’t considered your long-term financial goals.
If you’re a procrastinator, start small by learning about your finances. Pick a day of the month when you open all your bills and check your account balances. She recommends checking your credit score on a specific day of the year. Request that family or friends hold you responsible for your bad habits.
Next, set up an emergency fund before tackling anything else. Set up an automatic deposit so that a portion of your paycheck goes into an emergency savings account so that you don’t have to worry about it. Take things one step at a time, so you don’t get overwhelmed!
How to use this information for a financially successful marriage.
Step 1: Appoint a relationship CFO.
No, we don’t mean go out and post a work on Indeed; instead, look within the two of you. It’s important to play to your strengths if you want to be competitive in your marriage in terms of completing goals, assignments, and daily chores. When it comes to money, this is particularly true. Who do you think is better at managing your money between the two of you?
Choose the more capable nominee and appoint him or her as your relationship’s Chief Financial Officer (CFO). This distinction allows for more effective operations and guarantees the payment of such bills does not slip through the cracks. It’s a perfect way to establish boundaries within your relationship so that there’s no doubt about who paid what bills, from which account these bills should be paid, and what debts you have/haven’t paid off yet.
That does not imply that the CFO is responsible for all of the research. Rather, the CFO may keep track of the household budget and plan bill payments, but leave spending decisions to the other partner.
Will you need assistance deciding who should do what? Make a high-level budget, include what needs to be achieved – such as contributions to a retirement plan or savings funds – and then assign tasks to the appropriate people.
Step 2: Talk about debt early and frequently.
Debt is extremely common. It’s actually more uncommon to see a couple with no debt at all. In today’s world, 86 percent of marriages have at least one person who is in debt. 86% of the time! The good news is that 84% of couples say they are comfortable discussing all facets of their finances, including debt.
So, why is it so important to talk about debt before getting married early and often?
A debt discussion helps you and your soon-to-be spouse to determine how to manage debt accumulated prior to marriage, as well as debt incurred after marriage, just as it is necessary to make your payments on time. There are many approaches to this, but drafting a prenuptial agreement is the most reliable and insightful way to join marriage with financial security.
A prenup is a legally binding arrangement between you and your spouse that specifies that premarital debt should remain the “separate property” of the party that owns it, as well as that debt accrued after the marriage – be credit card debt, student loans, or other – should be treated as such. A prenuptial agreement will help you and your future partner talk about who is responsible for what so that expectations are transparent before you marry.
Will you, for example, be responsible for a portion of your potential spouse’s educational debt if he or she decides to attend graduate school? What’s to stop you? The response is less certain without a prenuptial agreement.
Beyond the question of who is responsible for what debt, you and your future partner must devise a strategy for achieving your financial objectives. Can you each prioritize paying off your student loans? Isn’t there a problem with credit card debt?
It’s a good idea to talk it over and write it down. By establishing this blueprint prior to marriage, you and your partner will be prepared to face any situation with a stable baseline and the principles to manage anything that will arise.
Step 3: Determine how inheritance should be treated.
What happens if Daddy Warbucks bequeaths his fortune to you? Isn’t that all your money, not your spouse’s?
Unless you have a prenuptial agreement, no. Of course, each state’s laws vary, but depending on the duration of your marriage, how the money was invested (in a joint account or separate? ), and the state laws in effect, some or all of the inheritance may be divided in a divorce.
If you or your soon-to-be spouse (or both) plan to obtain an inheritance during your marriage, talk about how you’d like that inheritance to be handled. Do you have children from a previous relationship? Should they be the sole beneficiaries of this inheritance? Or perhaps to your current spouse?
Most couples determine that inheritance should be treated as separate property rather than marital property. If this is the case, the prenuptial agreement may contain language stating that every inheritance should be kept separate from the spouse who obtained it.
Ambiguity is something that should be avoided in a marriage. Plan everything ahead of time so you can rest assured that the good stuff will remain a surprise (and not the avoidable stuff).
Step 4: Make a budget that works for you and your partner.
One of the most electrifying aspects of falling in love is compatibility. Even if not everybody understands “why it works” for you two, all that matters is that you two do.
Let’s strip the emotional causes and get rational on how you two imagine spending money as a couple when it comes to finances. How do you want to align your disparate spending patterns now that you’ve entered a legally binding contract to become “one” in the eyes of the law?
After all, your spending habits are also linked to how you live your life. In reality, your attitudes toward money often mirror how you spend your hard-earned money – shopping or saving? Is it better to keep Bitcoin or cash under your mattress?
These patterns become more apparent when you have a partner who holds opposing viewpoints. Before you make it official, you and babe need to talk about your different spending types and how to strike a balance between them.
What is a fair amount to save every month? What is a reasonable amount to save every month if your honey enjoys saving? There is no such thing as a “ideal” spending / saving style or financial habit, as there is for most things in life. It’s what works best for you and your partner so you can achieve all of your personal and future goals as a couple.
Step 5: Maintain flexibility!
Flexibility is a key characteristic of successful couples and is critical to the financial well-being of your marriage. You are setting yourself up for success if you can prepare but still roll with the punches and respond appropriately.
When a couple is financially flexible, it usually means that they have the majority of their goals in order while still being able to enjoy travel and a little spontaneity. You’ll have an easier time talking about finances if you and your partner both have a flexible outlook on life and money.
***Bonus: you and your partner will be able to remain flexible on all aspects of your relationship (such as what to watch tonight, what to order for dinner, or politics), or at least fantasize about it.
We’re cheering for you. Finances aren’t easy to tackle in a relationship, particularly if you two aren’t on the same page about it. The earlier you and your partner start including finances in your daily routine, the easier it will be on your relationship.
Do you have questions about how our platform works? Is there anything else we can do to help you get started? Send us an email at [email protected]. You’ve got this!
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].