Relationships are fulfilling yet challenging. Great relationships require honesty, trust, and commitment through the good times as well as the bad times. One of the most common causes of relationship breakdowns is financial hardship.
P.S. I definitely recommend reading my past article Should You Get a Prenup?
Let’s take a look at five financial habits that can harm your relationship.
1. Not having an agreed budget
Unless you and your partner are on excellent incomes with minimal expenses, you’ll need to sit down together and talk about your budget. I think almost everyone needs a budget, so please don't try to fool yourself and say that you do not!
First you’ll need to establish how you’d like to manage the budget. Will it be one pot of money that both your salaries and other income get paid into and that all expenses come out of?
Or will you divvy up your salaries and be individually responsible for various outgoings and spending? However you decide to manage it, you’ll need to determine your overall financial position, that is, total income minus total expenses (including debts). Is this a sustainable position, that is, are you living within your means?
Read Does your budget suck? – Budget Categories for more help.
2. Not having agreed financial goals
Flowing on from an agreed budget, are agreed financial goals. This is really important as it is a reflection of your overall goals and direction in life, which dramatically impact your relationship as a whole.
I think knowing what your financial goals is very important. If you never talk about your financial goals, I think it would be very difficult to get on the same page. If one person's goal is to spend all the time, yet the other person's goal is to save as much as possible, then there will be a major conflict at some point in the relationship.
Some key questions to discuss with your significant other include:
- Do you want to buy a home? If so, when do you think you will buy it? Or if you already have a home, when would you like to have your mortgage paid off?
- When would you and your significant other like to retire? Where would you like to retire and what sort of lifestyle would you like to have in retirement? Are you aiming for early retirement? Or retirement in your 60s? That is a huge difference!
- How much travel would you like to do throughout your life? Some people love traveling and can't get enough of it, whereas I have met others who hate traveling and would rather just stay at home.
- Would you like to change career directions at some point in your life and/or go back to school?
3. Lying or hiding debts
Honesty is very important for any successful and healthy relationship. If you have debts that you’ve accumulated prior and/or during your current relationship, you need to ensure your partner is aware of them.
Lying or hiding your debt can be a very bad thing. I mean, how would you feel if your significant other was hiding debt from you I'm going to assume that you would not be very pleased with that.
4. Different views on money
People value different things in life and place different values on those things. No one is the same. For some, saving money has been instilled in them from a young age and they value sensible spending and financial security.
For others, they may value personal style and image regardless of the cost. Are you and your partner on the same page here?
Perhaps it’s time to have a talk, as how you value money will determine how you spend and save. This will obviously have a big impact on your financial situation and relationship.
5. Breaking the budget
Have you and your partner agreed to a budget but you’re unable to stick to it? Once again, it’s probably time to consult a professional and look at how to curb your spending and stay on track.
Your relationship will be tested many times over by different things; don’t make money one of them. Get ahead of the game by having open and frank discussions with your partner about your financial position now and in the future. Be sure to get some outside and professional help if you need it too.
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