How Money Can Make or Break Your Relationship

How Money Can Make or Break Your Relationship

Pam Krueger   Fri, February 24, 2023

One of the biggest financial decisions we will make in life has nothing to do with money. At least, not for everyone. It’s what billionaire investor Warren Buffett claims to be the most important decision he has ever made: choosing who to marry.

Love and money are often a volatile mix that makes or breaks a relationship, according to a survey from the Institute for Divorce Financial Analysts, with “money issues” being one of the leading causes of divorce. However, research shows that couples who are financially in sync often have stronger, happier, and longer-lasting marriages.

That only happens through equal participation in your household’s finances. Sure, relationships involve compromise and sacrifice. But it need not be disproportionate.

Whether your relationship status is on date number two, recently engaged, on thin ice, or together so long you can’t remember your anniversary, here are a few tips to help you build a healthy relationship while preserving your own financial well-being.

Recognize How Your Money Personalities Differ

Turns out, the old adage “opposites attract” may be more fact than fiction. A paper published in the Journal of Marketing Research found that “tightwads” (people who spend less than they would like) and “spendthrifts” (people who spend more than they would like) usually marry each other.

While personality differences cause some relationship problems, it isn’t the real root of money issues. The source of the problem is remaining steadfast in your own financial habits and behaviors. Merging those differences can reshape each other’s financial behaviors in a positive way. For instance, the spendthrift of the relationship starts saving more for long-term goals. Over time, couples can find themselves in a sort of yin-yang of financial balance, bringing out the best in each other.

Consider a study from researchers at Washington University in St. Louis who found that having a conscientious spouse can boost your salary by $4,000 and increase your chances of getting promoted. In other words, your better half may encourage you to change your behavior and take greater risks to pursue growth opportunities you may not have pursued otherwise.

Understanding your conflicting habits is an important first step. Getting there, however, doesn’t just come naturally.

You Need to Talk About Money

In a relationship, the best way to grow financially isn’t through accounting but rather through communicating. Couples who communicate effectively make better financial decisions, according to a Fidelity Investments study. The couples who say they communicate well are more likely to expect to live a comfortable retirement, rate their household’s financial health as excellent or very good, discuss finances together monthly, and say money is not their greatest relationship challenge.

https://finance.yahoo.com/news/money-break-relationship-171227255.html