Love is in the air today as many couples celebrate Valentine’s Day. These are the days when money doesn’t seem to matter. It does represent the material side of life, which is understandably less valuable than a real connection between two people.
With that totally acknowledged and recognised, having a solid long-term relationship cannot be accomplished and sustained if the two partners are having conflicting views on money management and finances. Need a proof? Look at the percentage of marriages that end up in divorce because of financial reasons.
Although money isn’t something that anyone wants to talk about today, it is an issue that you must keep in mind as you develop a personal relationship. It doesn’t matter which set of strategies you’re planning to apply to your relationship as long as they are sound in managing your money, and you can reach an agreement with your partners on how to make them work.
Money issues that must be looked into and probably addressed at a certain stage of any relationship include the following.
Acceptable standard of living
When people can’t agree on what makes for an acceptable standard of living, the relationship will suffer. Early in any relationship, this may be a vague concept. But if you end up forming a family and having children, the topic will come up more often than you may be prepared for. For example, where you’d like to live in the long run, what type of education you will provide for your children, and how important it is to keep up with others’ financial standing and status. All of these issues can turn into crises if a couple is not in agreement. Having a clear idea about your life partner’s expectations can help you reach a compromise.
In many cases, a standard of living is controlled by the available income, but that is not the only factor. In many cases, how spouses think of the best ways to channel this income is what causes problems. Think of a scenario when one wants to upgrade a car, and the other thinks of putting money aside. The different views one where a big chunk of cash should be directed can be a point of conflict.
Investments
Although it is hard to foresee very early in a relationship how a person will manage investment years down the road, your sense of this person’s risk tolerance can be telling. When it comes to money management if you’re much more aggressive in investment than your partner, you may cause this person a lot of stress — and vice versa. That is why one of the points that you always must keep in mind, is how you and your partner will manage investments — jointly or separately — and if the choice will be acceptable to both of you.
It may sound ridiculous to talk with someone so early in a relationship about how you will be managing your investment portfolios and retirement funds decades later. And you do not need to. All you need is to look at this person’s attitude toward money, savings, financial security, risk taking and long-term financial planning. If you see that the two of you share similar or close views on all of the above, you probably will be able to bridge any gaps.
Gender roles
A huge cause of financial problems in many marriages is contradicting views of gender roles as far as money is concerned. In many societies, a man is expected to be the provider, and even a full-time working wife isn’t expected to contribute to the household expenses. This view has been moderated by the reality of seeing that a household can perform and function much better when depending on two incomes instead of one. But if one partner is still struggling with the shift in this mindset, problems can emerge.
Open communication is the best route in handling these fundamental perceptions. When you and your partner settle your views and reach an agreement on how you’d like each of you to contribute to the household finances, the situation can be handled with less sensitivity and stress for both of you.
The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.
Partners should know
What standard of living they envision for the future
What’s the acceptable risk level in investment
How they see gender roles in providing for a family
Their ability to communicate openly about money issues
R.O.
