Couples and Money


* Why do couples argue so much about finances?

Money represents security, and as with sex, dealing with it as a couple is based on trust. Just as in a new sexual relationship, it takes a lot of conversation and practice to understand a partner’s belief systems around money, their preferences and priorities, and how they behave around money in general. Too many people just jump right in and assume that the other person must be wired the same way they are because everything works so well in other areas. 

And as with sex, people will lie, or hide issues about money. Over time, these little deceptions usually emerge slowly and can erode trust. Couples eventually discover that just because they are attracted to each other, it does not mean that they see life, money or sex the same way. All of these areas have to be negotiated, often over and over again. 

Crushed expectations, lies, and different priorities can all lead to conflict, much of which could have been avoided if they had taken the time to get to know each other financially as well as they might have on other levels.

* Should couples share their bank accounts or keep them separate?

The answer to whether to merge finances is: whatever works for them. The American fantasy is that once you couple and marry you merge everything: family, money, households, and food. But if two people have very different diets, does that mean they cannot or should not eat together? As with food, you find common ground, but it may be just that, something to start with. It may not mean that you both will eat the same things. There may be shared financial goals or expenses, or there may not. How much or if any merger of money and expenses will depend on the situation. A red flag would be feeling pressured into doing what is expected to make the other person comfortable, even if it does not make you comfortable. 

Also, second and third marriages, where each partner may have their own complex asset situations, are different than when two young people are just starting out in life. Each situation is different and having a tax accountant look at the situation from an outside perspective is a good idea as well. The longer a couple is together, the greater the need to have merged finances. But there are exceptions to every rule.

BEFORE merging money, couples should always exchange the last three full tax returns and a complete current credit report. This action builds trust. It also tells you a lot about the person you are marrying. 

Asking to share this information will seem outrageous to some, but why not?  You will be entrusting your financial future to this other person. If they are forthcoming, if you have both been vulnerable about your strengths and weakness, and if you have taken the time to exchange your values about money deeply, this is the beginning of financial trust. Sharing what you learned from your family about money, priorities, attitudes about saving, tells you so much more about who this person is. It is essential that you know this before merging money. Is buying a house a goal for both of you? Who will manage the finances and why? How much input will the other have? What, if anything, are you willing to sacrifice today to have tomorrow?

If there is a considerable discrepancy in financial values and attitudes between partners, then there should either be no marriage or no complete merger of money. If one person is paying for everything, then there is less reason to have separate accounts, because if my money does not become our money, then the non-financially contributing partner will merely be the unpaid hired help. Keeping all but one checking account separate would be appropriate. Assuming both parties are generating income, then one joint account should be used for paying the mutual bills. In this way, each is sure about how much the other is providing.  It still requires an ongoing discussion about money and priorities.

* What do you do if one person thinks the other is spending too much on non-essentials?

If one partner is doing something that challenges the others beliefs about money, it offers an opportunity to have some of these missing conversations about money and finances. Approach it as curiosity about how they are seeing their spending both personally and in the context of the relationship.  Asking open-ended questions rather than making accusations will create the right atmosphere to share their most honest thoughts and feelings. 

Many people regress to earlier places in their life when it comes to money, especially under stress. Did getting a new toy mean you are loved? Does having money in the bank for emergencies make you feel safe? A parent whose pleasure or needs came before the needs of the family might create a trigger point in a spouse as an adult when their partner does something that reminds them of that parent. 

This question goes back to having agreements worked out before getting married. How did they decide to resolve conflicts in general? Money is loaded, as it represents security for most people. Take away security, and you take away trust. Take away trust, and it is likely the end of the relationship. Infidelity in itself does not end a relationship, a violation of trust can. 

Money in some ways is more complicated than sex in a relationship. Most couples have little to no meaningful discussion about finances before jumping in and making themselves totally vulnerable to another person. There are no absolute rules of how to handle money for a couple, but this most dangerous of minefields should be well-explored territory before you say “I do” and merge your money with another person.

Couple and Money Questionnaire

If you are a new couple, contemplating marriage, considering merging bank accounts and assets, or a couple that is fighting over money This questionnaire is for you. It is comprised of both an individual and a relationship questionnaire. If you purchase this, you should print off two copies and each of you should fill out both questionnaires privately and then compare your answers. The questions are designed to give you insight into both how you see money as well as how your partner does. 

Couples have found this a very useful tool to help them navigate the difficult conversation about. Each couple if they are going to stay together and or merge their money and assets needs to have common ground and basic understandings about money in the relationship. 

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