Are there financial factors that lead to the end of romantic relationships?

Financial Separation Decision Before Seriousness

Let’s start with some caveats. We are not talking about setting standards based on how much money a person makes – like a salary of $25,000 versus $100,000. We are also not talking about setting standards based on bank balances, portfolio sizes, or net worth.

We are discussing the habits that a person displays in their handling of money. Here are some examples: Do they spend recklessly, throwing down their credit card without a thought to what impulse purchase captivates them? Are they stingy, refusing to spend money even on the simplest necessities, leaving waitstaff with a paltry 10% tip? Do they boast about their investments, telling war stories about how they jumped in and out of the market dozens of times last week? Do they make every move based on some “hot” tip they read online or saw on TV? Do they brag about the notion that they will achieve at least double-digit returns “soon,” once this get-rich-quick scheme comes to fruition? Or do they look at you silently the moment you mention your 401(k) plan?

Financial Problems Caused by Mismatched Views

According to a survey by Ramsey Solutions, money is the most common issue that married couples argue about. Furthermore, about one-third of participants who reported arguing about money with their spouses admitted to hiding a purchase from their partner because they feared disapproval.

On the other hand, 87% of survey participants who described their marriage as “great” said they worked with their partner to set long-term financial goals, compared to 41% of participants who rated their marriage as “good” or “in crisis.” Those in “great” marriages were also more likely to report discussing money with their spouse at least once a week. In other words, they were better at communicating about financial matters, as well as setting mutually beneficial goals.

It is not surprising that other research has shown that discussions about money are stronger predictors of divorce than other types of conflicts.

What Money Reveals About Our Priorities

If you are a saver and a risk-averse investor, there is a good chance that your worldview and priorities involve planning for the future, delaying gratification, and making logical, data-driven decisions.

It’s not surprising that a relationship with someone who acts recklessly, makes impulsive and emotional decisions, lives in the moment with no regard for the future, and has a bank balance subject to wild fluctuations may not be compatible with you.

The underlying issue is not money itself – it is the fact that you have different visions, habits, and practices in managing your life.

While opposites may attract and sometimes balance each other, individuals who are vastly different may struggle to merge their lives and futures together as one unit.

In other words, it is not superficial to consider financial habits a red flag in a relationship, because the problem is not the partner’s net worth – it is their priorities.

Can a Compromise Be Reached?

The good news is that you and your partner do not need to agree on every detail. In fact, it may be better if you don’t. What matters most is that your overall perspectives on how to manage your finances are “in the ballpark” of each other.

It’s okay if one person tends to spend while the other leans towards frugality. It’s okay if one invests a little more boldly while the other is more conservative.

You don’t need to be identical financial twins. As long as you have the same range – as long as you’re not too far apart on the financial spectrum and the spending/saving spectrum – there is a good chance you will find common ground.

In

In reality, your relationship may become richer because of this.

Sources

The Balance only uses high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editorial process to learn more about how we verify facts and maintain the accuracy, reliability, and quality of our content.

DaveRamsey.com. “Money, Marriage, and Communication”.

Jeffrey Dew and Sonya Britt-Lutter. “Examining the Relationship Between Financial Issues and Divorce”, Family Relations.

Source: https://www.thebalancemoney.com/should-you-have-money-related-relationship-deal-breakers-4032593