Welcome
Is keeping finances separate the key to a happy relationship?
HOW MONEY CAN BUILD OR BREAK YOUR RELATIONSHIP
My dear Friends,
Of course, you know that money is one of the most common subjects couples argue about. A study by the University of Tennesee found that regardless of the happiness level in relationships, money is a topic couples repeatedly disagree on.
So, I have plenty of experience with this situation. Talking to my husband about money issues was never a pleasant experience; it finally contributed to my divorce. Money is an emotionally charged topic; money fights are usually a nasty experience, so many women avoid that, especially in a relationship. For some peace and quiet, they forget how much they put themselves at a disadvantage.
So, we know that not talking about money is a bad idea. But would keeping finances separate be the key to a happy relationship?
If you want to find out more, just continue reading!
Primary attractor
Wealth is still a primary attractor in a relationship. Damona Hoffman, a dating coach, found that singles who considered wealth an important factor in a match during the pandemic nearly doubled. Owning wealth has become a plus in the dating market.
This does not surprise me. Throughout history, money has been the driving factor for a suitable match. Until Romanticism told us otherwise. Up to that period, marriages were never about love or made in heaven but contractual arrangements between parties of similar financial backgrounds.
Of course, power or access to power was also an important bargaining chip and worth a lot of money. Yet money and having similar financial backgrounds played the key role. This limited financial misunderstandings or different attitudes to financial issues.
It has to be mentioned women were more than often the silent party and valuable bargaining chips.
Marriage contracts entailed a lot of dealings and wheelings before they could be signed. Depending on their cultural background, women could own their wealth. The husband or a father would, however, manage their finances. Per definition as fiduciary. Reality often proved otherwise, and a woman’s financial issues often ended in a bitter dispute.
So, both parties had a similar attitude to money and shared goals and values. However, the Romantic Period put an end to this. A marriage without love, for financial reasons only, was declared out.
Interestingly this new trend put women in a financially far worse position than ever in history. After the marriage, the wife and her dowery became the husband’s property. Any earnings she had belonged to the husband. Sadly, women had become more dependent than ever before.
The Psychology
Today, it is widely considered that “shared values and common goals” are the main ingredients for a happy marriage. So, one would assume that the subject of personal finance is one a couple should discuss. After all, it is a major parameter for goals and values.
Because we’re all raised differently and come from varying socioeconomic backgrounds, how we think about and understand money can vary significantly from person to person.
Entangled in the teachings of the Romantic Period, we marry out of love. At least in most cultures. Consequently, it is highly unlikely that both partners have the same or a similar money mindset.
So, regardless of your upbringing and how difficult discussing money can be, it is important to have that conversation with your partner.
The foundation of anyone’s understanding and relationship with money is based with their family of origin coupled with any financial literacy education they receive throughout their life
Dr.Alex Melkumian, Financial Psychology Center, Los Angeles, USA
Goals and values rarely align but understanding a partner and finding a compromise early on in a relationship is an important ingredient for a happy relationship.
So, why do we leave money out of the equation and see it as a sign of love to share everything – especially finance?
Shared experiences, Separate Accounts
Keeping a level of financial independence is more important to some individuals than others. The size of your wealth should also play a part in this decision. If you choose to keep your finances completely separate, you need to make sure your partner understands your reasoning and why it matters to you.
This might be considered unromantic, but it is an important issue in the long term. Your partner might feel sensitive or think you don’t trust him or aren’t ready to commit fully. It is your job to dissolve these fears. Make sure he also understands his advantage and how much less friction your relationship will have.
Perhaps he feels the same — after all, for many, their finances are a part of their lives that they don’t want to share with even their most intimate partner. This, however, should not lead to leaving the other partner completely in the dark, as this usually ends in a bad surprise.
When managing your money as a couple, you have several options. Of course, everything depends on how financially dependent you are. But even if you are fully dependent, there are various options for handling money issues in a partnership.
If you have your own money, you have these options:
If you are dependent, you have these options:
Yet, every decision is extremely personal to each couple. However, having separate finances has merits, but this needs coordination and trust. For more convenience, you might decide to have a shared account for everyday and household spending but keep separate personal accounts and do not share financial advisors/wealth managers. In any case, you must work out how to address your outgoings. You might choose to split bills equally or in proportion to one’s income.
The benefits of separate finances
There is, however, one drawback – if something goes wrong with your finances, you have no one to blame but you!
How to talk About money
Talking about money is difficult. A Wells Fargo survey showed people feel that discussing politics or religion is easier than talking about personal finance.
For most couples, the idea of openly discussing money is enough to set off a wave of panic. Not only does it seem completely unromantic, but we often don’t even want to admit certain things to ourselves, let alone our intimate partners.
If your money situation is less than ideal, it can bring fears of judgement or embarrassment. If you’re a wealth owner, you assume being “loved” for your money. Or, being financially savvy and enjoying talking about subjects like your portfolio strategy or the latest meme stock could bring up a feeling of inadequacy from the other.
While it might not be necessary for the early days of your relationship. But it becomes serious once you decide to cohabit. There’s no way around it: You need to talk about money!
It’s rare that in a romantic relationship both partners come to it with the same, or similar, money story.
Dr.Alex Melkumian, Financial Psychology Center, Los Angeles, USA
financial intimacy Guide:
Bottom Line
Whether you consider having separate finances to be key to a happy relationship or not, one thing remains undisputed: the importance of discussing money issues at any stage of a relationship.
Ultimately, whether you choose to have separate finances or not is strictly up to you and your partner. The important thing is that you know the drawbacks and positives of doing so and understand that it doesn’t have to be that way forever. If you choose to have a joint account one day, that’s okay, too. It’s simply important to do what makes sense for you at any given time in your life.
