You may love your significant other, but do they drive you crazy when they choose the restaurant, then complain about the prices on the menu? Or give you expensive gifts that you know they can't afford? According to the Pew Research Center nearly four in ten married adults say they often or sometimes disagree with their spouse over money.
Sarah J. Halpin Certified Financial Planner with The Danforth Group of Wells Fargo Advisors spoke with us about financial compatibility and if it's important for couples to be a good financial fit.
Financial compatibility is having similar views and values around money and shared lifestyle choices when it comes to spending. You don't have to be clones of each other to have a successful financial relationship. But you do want to understand and respect your differences on money related issues and work on getting financially "in sync" to avoid potential future conflicts.
It's especially important to be "on the same page" in the following three areas:
Money Talks - If your financial life is connected to someone else you have to be willing to share information that affects both of your lives. Avoiding money discussions or being secretive about money can lead to problems. Are you willing to discuss how much money you really make? Are you both willing to share what you own and what you owe? Many couples discover the extent of their partner's debt situation after marriage. Excessive debt and a tarnished credit history can be an unpleasant surprise, affect both of your credit scores and be a big burden on a new couple's future.
Ours or Mine - Do you have similar attitudes around household contributions and managing the household finances? Do you agree on whether someone will take the lead in financial matters or will you share tasks such as paying bills and managing a budget? Will you have joint or separate finances? Will you have equal say in how household dollars are spent or does the person who makes the most money think they should have more influence on how it's spent? Disproportionate roles or control in a relationship can lead to resentment and sabotage of household goals. You are more likely to have a positive outcome if you and your other half have joint control, are united and work together as a team to achieve your financial goals.
Lifestyle Choices- Do you see yourselves living simply or extravagantly? Are your lifestyle choices compatible especially around borrowing and spending? For example, if it's important to you to be debt free and your partner has just financed a new luxury car and you are having trouble making the car payments it is going to have a negative impact on your finances and your relationship. In the worst cases, overspending can cause an irreparable rift in a relationship.
Disagreements over money and a failure to have a united financial plan can sink a relationship. If you are financial opposites it's going to take time and effort to resolve differences and find common ground to help move your relationship closer to financial harmony.
What do you think? Is it important for couples to be financially compatible?
Source: Pew Research Center
The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions. Investment services are offered through Wells Fargo Advisors, LLC member SIPC CAR 0213-01711