Financial relationships refer to any type of connection that you have with a person that can be affected by your individual financial situation. It can be within the family, with your spouse, relative, friends and business partners. In a society that thrives in consumerism, money plays an important in our daily lives.
While the practices and concepts that we will discuss here are applicable to all type of relationships, we will be concentrating on marriages. It is important for you to understand that your marriage and personal finances will always affect each other. In fact, one of the leading causes of divorce is related to finances. It seems that among the other connections, this is the most destructive of all the relationships that can be ruined. It does not only affect the life of the couple, it can also affect the life of their children.
In a study published on the NC State University, it is revealed that 39% of their survey participants cited that finances is the primary cause of conflict. 54% of cited it as the secondary source of marital problems. According to the report found on NCSU.edu, this ranks higher than problems about their children, abuse, etc.
Why do relationships fail because of money?
Before you can learn how to keep your finances from destroying your marriage or any other financial relationships that you have, let us discuss why it has such an effect in the first place.
It shows your differences. You have to realize that different spending styles dictate a difference in lifestyle preferences. The way you spend tells a lot about the lifestyle that you want to live. In effect, you will both want a different lifestyle and unless you reach a compromise, one or both of you will always be unhappy. That is because no one is really living the life that they want to have. If you are a saver and your spouse or partner is a spender that can create a sizable tension that will keep you from financial harmony.
It causes stress in the relationship. According to a survey done by Credit.com, it is revealed that 40% of their respondents admitted that credit issues cause stress in their financial relationship. When you do not have enough money to pay for the basic necessities that the family needs, they are bound to feel a certain amount of stress at home. This can cause couples to blame each other, feel discontent and other negative emotions.
It can break your trust. Financial infidelity is a strong cause of rift between a financial relationship. When you keep purchases from your partner or spouse, you will think that it is not significant enough to break their trust. But believe it or not, a lie is a lie regardless of the situation. You have to be careful when you are keeping financial secrets from one another. That is where a lot of troubles usually begin.
It affects your self-esteem. In a consumerist society, money is a big measurement of our success. If you do not have a lot of it, you will most likely suffer from a low self esteem. If you do not do something about it, that can cause some emotional problems and insecurities for you. It can translate negatively in your relationship as you try to lash out at the person closest to you – your spouse or your partner.
It can be a tool for abuse. In contrast to a low self esteem, money can be used by over-confident individuals to try and control their spouse or partner. Money can be a tool for abuse and this can be a reason to drive apart financial relationships.
Of course, all situations are different and some of these may not be the reason why relationships are destroyed by money. But whether your reason is included in this list or not, it goes to show that money can influence your relationship.
4 ways you can save your relationship from the effects of a financial ruin
While these could make you fear getting into a relationship, you need to know that there are practices that will help keep your financial relationship from being ruined. Here are four of the most important that we know everyone should do.
Be honest about debt.
One of the reasons why relationships fail is because they are not honest about their credit problems. People make mistakes and you can only solve it if you start by being honest. Do not wait until it is too late before you tell your partner about the debt. You have to be true to your mistakes from the start so you can fix your debt problems together. You can either use this situation as a way to bring you both closer or to drive you apart. We suggest that you go for the former. And once you have dealt with this, you should make sure that you will control each other so that nobody will get in debt again. Your financial relationship may not survive another credit crisis.
Take care of your individual credit reputations.
First of all, you need to take good care of your respective credit ratings because you can affect each other. If you have a low score and your partner has a high score, you can bring them down in case you have to borrow money jointly. If you will get a mortgage loan, that can affect your application – especially if you are married. But even if one of you have a low credit score, do not be too quick to ruin the relationship because of it. Credit scores can improve, you just have to work on it together.
Work as a team.
In every relationship, you need to learn how to work as a team. This is especially true for your finances. Even the mere creation of a budget has to be done together. Do not leave the task with the other and then end up blaming them for any mishaps in your financial situation. In paying off debt, saving for an emergency fund, or making financial plans, you have to be there doing it together. Your finances affect the two of you so both of your inputs are important.
Lastly, you want to communicate about your finances all the time. Good or bad, you have to talk about it. That is how you can work as a team and that is how you can air out problems and find ways to solve them. Do not brush it aside and leave it to the other person to deal with. Make sure that you will ask the opinion of both parties to ensure that you are both on the same page when it comes to any financial decision. If there is a problem, air it out – immediately.
According to an infographic from CreditDonkey.com, financial compromise will bring peace to any marriage. Regardless if you have different preferences when it comes to your spending, you have to understand that you can make it work if you are willing to give and take. The infographic mentioned that this compromise can be done by establishing financial goals together, creating and following a budget, building up savings, and paying down debt.
You have to remember that your financial relationship will only be as strong as you let it. Money can affect it but it does not have to end in ruins. Any financial problem can lead to a stronger relationship if you take care of it and you do not let anything harm it.