Are You Compatible? Financial Control Issues Couples Face and How to Navigate Them
For couples, what’s one of the biggest tests of financial compatibility? If you said it’s the idea of financial control and agreeing upon who should hold it – you’re right.
Research shows this is not easy for most. According to a 2019 Policygenius study, one in five individuals in relationships believe their partner is irresponsible with finances. The same study also found that the way in which couples manage their money varies widely, from one partner taking control (34%), to both partners managing it together (43%), to partners managing finances separately (22%).
But how the money is controlled need not define a couple’s financial compatibility.
What’s Most Important
The crucial factor is understanding that not every partner needs or wants the same level of financial control at all times or in all situations. Some individuals may be comfortable having one partner take the lead on some financial decisions and responsibilities, while others prefer to share. And these roles may switch over time.
To be financially compatible, it helps to have an idea of the common control issues that can arise and how to solve them. Here are some of the issues couples may face and ways to address them.
Making Long-Term Financial Decisions
Some financial decisions – like whether or not you’re going to buy a home, how and when you’ll pay down debt and how you’ll save for retirement – can only happen with long-term planning.
Fortunately, these decisions tend to be few and far between. Both partners will likely want to have a say in the outcome and come to an agreement on what it will take to get there.
- Financially compatible couples are able to agree on these goals and the path they’ll take to reach them.
Many financial decisions are seemingly less important than the long-term ones: the occasional dinner out, buying groceries and miscellaneous items, entertainment costs and clothing.
Admittedly, the spending habits each person follows in making these purchases can have some bearing on how easy it is to achieve the couple’s long-term financial goals. That means at least one or both partners will need to keep an eye on everyday spending. For example, if paying off debt is a financial goal, partners may have to agree to cut back in certain areas to achieve that goal.
On the other hand, many individuals want to maintain some autonomy over their spending decisions, at least up to a certain percent of income or their budget.
- Financially compatible couples come to an agreement on when and whether open discussion needs to take place for specific purchases, and what considerations play a role in whether such a discussion is needed or not.
When One Partner Earns More
It’s fairly common for one partner to earn more than the other, and income disparity is often a cause of disagreements or resentment. This becomes more of an issue if one partner feels they have more of a say in what happens to the money.
Regardless of where the income comes from, however, successful couples should have shared financial goals and a mutual plan for reaching them.
- Financially compatible couples recognize that even if there’s a significant income difference, both partners are on the same team and should work together to create a fair and balanced budget.
Options may range from paying proportions of certain expenses based on each partner’s income, to pooling their income before paying the bills. Or, maybe the higher-earning spouse decides to delegate spending decisions to the lower-earning spouse.
- Financially compatible couples avoid allowing one partner’s extra income to be used as leverage when making financial decisions.
To be financially compatible, it helps to have an idea of the common control issues that can arise and how to solve them.
Saving vs. Spending
In many relationships, one partner is viewed as the “saver,” while the other is considered the “spender.” One person might enjoy working with the numbers (tends to be the saver), while the other person views those tasks as a necessary evil.
While this type of imbalance can be problematic, the real issue arises when one partner neglects to hear the other’s input or turns a blind eye to the financial realities the couple is facing.
- Financially compatible couples deal with these personality differences by understanding they exist and looking for ways to ensure that both saving and spending behaviors feel equitable to each partner and are aligned with their goals. That may be agreeing on a budget to keep them on track or coming to an agreement on each partner’s spending and saving habits over time.
Back in the day, it was common for couples to pool their savings and incomes into shared accounts. Today, this is no longer the case, as many couples enter a relationship bringing large pools of savings, investments or even debt burdens along with them.
Therefore, some experts recommend waiting until marriage to join bank accounts, so that a breakup doesn’t result in one of the partners draining a shared fund. A common compromise is maintaining separate accounts, but keeping a joint bank account for shared household expenses.
Even those who don’t want joint accounts should consider developing joint budgets. This way the partners can share the decision-making power over their money as a team, while still tracking and managing where their money is going individually.
- Financially compatible couples understand that even if partners don’t combine finances, their money situation may still be connected and should be treated as such.
The Power of Compromise
The idea of compromising in certain financial situations may also be a necessary fact of life for many couples. Sometimes one partner will get their way, and sometimes, the other. Arriving at a compromise can be difficult, and sometimes couples may need to consult with an informed, but neutral third party, such as a financial counselor, to find the right compromise.
- Financially compatible couples are aware that making financial decisions of all types are not always easy, but many options – including compromise and seeking outside help – are available to help them.
Want help in boosting your financial compatibility? Take our survey together to make your own plan in just three minutes. You can use this as a starting point in your financial discussions.