Couples argue about many things, like sex and chores, but money is probably the biggest source of conflict, which can actually impede on other areas in the relationship like sex and chores. In fact, nearly three in four American couples say financial decisions constantly cause stress in their relationship with nearly half admitting it negatively impacted intimacy with their partner. The same survey found that 69 percent of couples have had a disagreement with their companion about finances in the past year.
So there you have it: pretty much every couple fights about money. But why?
“Nearly every fight about money can be boiled down to differences in financial philosophies,” Judi Leahy Senior Wealth Advisor, Citi Personal Wealth Management, tells SheKnows. “The way you feel about spending, saving, investing and planning is shaped by your individual experience, starting from seeing how your parents handled money and your level of financial security growing up.”
As a result, says Leahy, these differing philosophies around money become part of the fabric of who we are, and don’t typically change as we age.
“This difference in financial philosophies is then compounded by a lack of communication – money can often be an uncomfortable topic to broach in relationships, for both married and unmarried partners,” she explains. “But when you can better understand why your partner spends, saves, borrows and invests money in the ways that you disagree with, then you can have calmer and more constructive conversations about financial matters.”
With that in mind, Leahy outlines the most common fights about money every couple has and how to resolve them.
Conflict #1: When one partner spends more than the other partner approves of
You know the scenario: you splurged your tax refund on spa day while your partner would’ve preferred it go towards your savings. A fight ensures. Leahy says this is normal in a spender versus saver dynamic. “This can often lead to resentment on both sides, with the ‘saver’ resenting the ‘spende’” for spending their shared finances, and the ‘spender’ resenting the ‘saver; for trying to reign them in,” she says. “They may feel like the ‘saver’ is infringing on their financial autonomy. This mutual resentment is often compounded by anxiety on the side of the ‘saver’ as they pinch pennies, and shame and guilt on the side of the ‘spender’ as they hide shopping bags from their partner.”
How to resolve: Leahy recommends diffusing the resentment before it builds up by communicating. “Be transparent with your partner about your spending habits,” she says. “In these situations, I often recommend that couples keep separate credit cards and bank accounts, so that both have the freedom to spend as they choose.” If you do choose to set up a joint account with your partner, Leahy suggests having an upfront conversation about what that money is to be used for. “This is your opportunity to express any anxieties you have about money so your partner is more understanding down the line. This will also help reduce the number of disagreements on day-to-day spending.” This also goes for any major purchases made on a shared account. “Coming to agreements in advance will reduce the severity and number of disputes in your relationship,” Leahy says.
Conflict #2: When one partner practices financial infidelity
According to Leahy, financial infidelity is any form of dishonesty or secrecy when it comes to money in your relationship. This can range from small indulgences that you hide from your partner – think hiding shopping bags and receipts – to heavy baggage, such as large sums of existing debt and excessive gambling. Why does this happen? “For folks practicing financial infidelity, they may feel ashamed of their financial past or current habits,” Leahy explains. “Meanwhile, their partners may feel blindsided or betrayed by their other halves.”
How to resolve: “From the get-go, you should always be upfront and honest with your partner,” Leahy explains. “That being said, sometimes one partner can get away with keeping their skeletons in the closet and concealing their secret spending habits for years. The best time to have an open and honest conversation with your partner is now; you need to make sure you’re keeping your assets safe.”
If you suspect your partner may be hiding secret debts or expenses, Leahy recommends confronting them with empathy. “When sitting down to discuss their financial infidelity, prioritize listening. Find out all the details and encourage them to lay everything out on the table so you can determine the best course of action going forward together.”
If there’s a large amount of debt at stake, Leahy suggests speaking with a trusted financial advisor or attorney to gain clarity on your state’s laws and individual situation.
Conflict #3: When extended family enters the picture
In-laws can be a typical source of tension between couples, and according to Leahy, finances are no different. “Dealing with in-laws can be draining enough without layering in a financial component. And when extended family starts coming to you or your partner asking for financial support, there can be a whole new set of challenges,” she says.
For example, a caregiver or provider may find themself in a tough spot if their partner is against financially supporting their extended family. Meanwhile, their partner may feel like they are being taken advantage of by their in-laws and harbor resentment.
How to resolve: Be open and honest about your family’s financial needs. “If you expect that you will need to provide for members of your family, have a preemptive conversation with your partner so there are no surprises when they come knocking on your door,” Leahy suggests. “Sometimes cultural differences play a role in how spouses view familial support. It is always good to be mindful of those differences and understand your partner’s financial responsibilities to their families.” She recommends having a conversation with your partner to outline the expected quantity and cadence of financial contributions to give a broader opportunity to share your culture and heritage with your partner.
For couples serving as primary caregivers to aging parents and in-laws, Leahy points out the Credit for Caring Act of 2021 allows an eligible caregiver a tax credit of up to $5,000 for 30% of the cost of long-term expenses that exceed $2,000 in a given year. “This tax credit can ease the financial burden of caring for in-laws and alleviate a major relationship stressor.”
Conflict #4: When couples face a sudden change to their financial situation
Sometimes life happens. Illness, loss of income, or an unplanned pregnancy, can all place financial stress on a relationship and cause frequent arguments.
How to resolve: Ideally, says Leahy, you will have already set up an emergency fund and agreed upon a plan for these types of situations. However, if you haven’t, not all hope is lost. “Sit down with your partner and map out all your individual and shared assets to see what resources you can pull from in the interim,” she suggests.
Additionally, she recommends developing a realistic budget together that you both can follow for the near future based on your actual financial habits. “It’s unrealistic to cut out all expenses and setting drastic goals will only set you up for failure and cause more arguments,” she says. “Consider your current spending patterns and identify the places where you both can trim costs.”
Conflict #5: When approaches to parenting differ
From saving for college for treating them to that expensive pair of jeans or toy, it’s common for couples to disagree over how to best raise their children and, according to Leahy, the need to ensure their financial security can become particularly contentious as each spouse fights to have their approach to parenting “win” over their partner’s.
“Sometimes, the ‘spender versus saver’ dynamic in a relationship can extend to parenting styles, with one parent more inclined to splurge on their children and the more prudent parent wanting to reign in their partner’s spending to teach their children the importance of saving,” she says. “This can be an ongoing issue as children grow up as one parent doles out extra funds to their adult kids, who’ve become accustomed to their parents’ financial assistance over the years.”
How to resolve: “Don’t let quarrels over smaller ticket items strain your relationship,” Leahy says. “Rather, channel that energy towards the ‘meat and potatoes’ of your child’s financial future. Sit down and have thoughtful conversations with your partner about education and legacy planning.” If you haven’t already, Leahy recommends choosing a 529 plan together. “Determine the amount and cadence of your individual contributions and set up automatic recurring deposits,” she says.
She also suggests having open conversations about your estate plan. “Make sure that your children are listed as beneficiaries in your will. I also recommend setting up a trust for your kids. Trust funds are often thought of as limited to ultra-high net worth families, but they are a valuable estate planning tool for families of more moderate means as well. A trust can be particularly beneficial to your child’s future financial wellbeing as wills can be protested and open to probate.” With your partner, says Leahy, determine who will serve as trustees, or the appointed fiduciaries. “While some parents will appoint an extended family member, I recommend appointing a more neutral third party such as a professional fiduciary or trust bank.”
Additionally, in order to teach your child the value of investing, Leahy says it might be a good idea to open a custodial account that both you and your partner have full access to. “Align on a long-term investment strategy and show your child the steady growth over time,” she says.
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