The rise of the idea of financial compatibility could be a healthy trend for modern relationships. Conversations about personal finances require that someone acknowledge and embrace their financial identity – what they believe about money and how it motivates them.
Financial compatibility between partners is an idea that is becoming more popular. According to WealthUp, a wealth management and financial literacy site, “Financial compatibility is about understanding and respecting each other’s behaviors, values, and habits in regards to money.”
They offer some strategies to find out if you are financially compatible with your partner and even provide some questions to get the conversation started. But even with those tips in hand, discussing personal finances can be challenging for many partners, especially in our culture which does not encourage people to discuss the topic of money openly.
Having discussions about personal finances with others has the potential to strengthen your relationships and prevent misunderstanding, but there are some important things to keep in mind about how our culture has treated the topic of money before approaching this sort of conversation.
This article will help you prepare for a conversation about financial compatibility and hopefully prevent conflict between you and your partner.
“Arguments about money are by far the top predictor of divorce.”
I first heard about the idea of financial compatibility recently from my father. While we were catching up over a couple of Moscow Mules, he expressed how grateful he is that he and his significant other are so “financially compatible.” My father, who is not a man of the internet, seemed to have come up with the term all on his own.
The following day, I sat down with Greg Linney, who is a retired dentist turned real estate investor. I respect his perspective on individual and financial well being. In our conversation together, he also emphasized the importance of financial compatibility in a relationship or partnership.
Greg first learned the idea from his grandfather: “It's not about what you bring in the front door. It's what goes out the back door.”
“...He always impressed upon me the importance of, it's not what you make; it's what you spend… But more importantly, what he was talking about was the partner part of it, the spouse. Male, female, doesn't matter. Doesn't matter how much you're bringing in if... you're not on the same page and you're spending more than you're making, then there's going to be a lot of strife in the relationship.”
I know first-hand how money can impact a relationship. I am quite confident that differing beliefs about money and finances was a primary factor in my parents’ decision to divorce.
This background of mine is a huge reason why I have devoted myself to debunking misconceptions about money and developing a healthy relationship with our means of exchange.
Sonya Britt, a Kansas State University assistant professor, discovered, “Arguments about money are by far the top predictor of divorce.”
Britt explains that money arguments are more intense than other arguments and can add a lot of stress to the relationship. “Aside from a negative effect on children, increased stress leads to a further decrease in financial planning that could help better the situation.”
It is puzzling that something as common as money can cause such strife between people.
Why does the topic of money have such potential for discord and division?
Greg helped me answer that. “It's twofold. In a relationship, I don't think most people have these real conversations… They don't have those real, honest conversations because they're just not used to doing it. Their parents have never done it. They've never watched those conversations go on. There's just assumptions that, ‘Oh, everything's okay.’” People may struggle with the topic of money because they don’t have experience discussing money and they haven’t confronted the beliefs they may have inherited from their parents.
I can relate to that. Growing up, I didn’t witness the adults in my life candidly discuss their feelings about money. I only saw them react to or complain about money, so I had no model for how to have those “real, honest conversations” about money.
If you grew up in America, you might have heard your parents tell you to avoid discussing touchy topics like religion or politics. For me, the topic of money felt equally potent and forbidden. Maybe you feel the same.
If money is never explained to you, it feels like this god-like force in our world.
Think of it from a child’s perspective: money is this thing that everyone wants, uses, and needs; it divides and distinguishes people, blessing some and not others; it is something you are told to strive for, with the promise that it will make your life easier, better, happier, etc. You are told vague, arbitrary ideas of how to set yourself up for a life that maximizes your monetary return: “Do this, not that.”
Perform this ritual (go to college) and do this dance (invest in the stock market), and you will appease the money god.
These are all well-meaning directives from the people who raised you, but they are shallow. They do not appropriately frame money in relation to the rest of life’s pursuits. In fact, they create the mindset that the pursuit of money is above all others.
If you were raised with this mindset (which I would argue most Americans were), money holds a lot of promise for you. It is the gatekeeper to your happiness. It is the defender of your future. It is the emancipator of yourself and your family. It is the provider of worth, the signifier of your status, the safeguard of your security, the champion of your control, and more all rolled into one word – money. You can see how, wrapped up in the basic idea of money, there is so much other crap that has no business being there.
Do we honestly believe that money alone can deliver on all those promises?
This thinking may be why having those “real, honest conversations'' about money can be so challenging. For people who were raised to believe in money’s omnipotence, when they talk about money, they are actually talking about all of those other beliefs and expectations around money.
This is why the topic of money can be so dangerous, especially to a relationship. If money can promise infinite goodness in your life, then a disagreement about personal finances is a big deal – it is a threat to your survival, happiness, and comfort in the future. The result may be anger, defensiveness, or even violence, like you would expect from a wild animal backed into a corner.
On top of it all, most people have no idea how to talk about money in a rational way. Like Greg said, “Their parents have never done it. They've never watched those conversations go on.” If parents do not talk openly about their financial lives with their children and young people are not taught financial literacy in school, money remains a mystical entity for every generation.
If you value the vague promises of money over another human being, you will either remove that person from your life or resent them forever. Merely by the fact that they have different financial practices than you, they will be perceived as a threat to your life and livelihood.
Obviously, this is not a healthy conception of money. It sounds silly, yet this is how many people behave. Do we honestly believe that money alone can deliver on all those promises?
If you behave as if a single thing can bring you boundless goodness, that is a sign that you have an unhealthy relationship with whatever that thing is. Like alcohol to an alcoholic, money seems to promise the world, but it always comes up short.
Your behaviors are guided by your beliefs.
So after all that, you still want to have a conversation about your personal financial beliefs with your partner and have it be a healthy, productive conversation. That’s great. You should! (Somebody’s got to do it.) Here are some final things to keep in mind:
Be patient. It will take time. In fact, it will most likely take more than one conversation to reconcile the beliefs about money with which you and your partner were brought up.
Remember that your partner and your relationship are more important than money. No one in their right mind would argue that money is more important than a close relationship, so don’t act like it is. If there is a disagreement, keep it cool; it does not spell doom for yourself or your relationship. It just means that you will have to be creative to overcome it and find a compromise.
Notice your behaviors and emotions around money – Here are some examples of behaviors that might be a sign of unacknowledged beliefs about money:
You hesitate to ask your partner to share an expense like groceries or split the bill somewhere.
You feel entitled to be paid back when you are owed but resent having to pay others back.
You feel the need to downplay other people’s financial successes or big purchases and justify to yourself or others why you are not in the same position. That may sound like: “I could have that too, if I had [insert excuse]” or “He could only afford that because [insert some excuse].”
Your behaviors are guided by your beliefs. At the end of the day, your behaviors are what ultimately create how your life looks and who is in it – they are the only way to reveal to others who you truly are.
The goal is always to reconcile your beliefs with your behavior, to bring into alignment what we say we believe and who we want to be with how we behave. When these things are aligned, you create authenticity and strengthen your relationships with others and with yourself.
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