Bruce Helmer and Peg Webb

More than a third (36%) of adults who are married or in a serious relationship report that money is the single biggest source of stress in their relationship, according to a 2018 Harris Poll/Ally Bank survey.

Often, friction can occur when one partner is a “saver” and the other a “spender.” In part, this is because saving and spending decisions arise from both nurture (how your views were shaped in childhood or during a specific personal crisis) and nature (personal comfort level about spending or saving, your career choice, or whether you have dependents).

More broadly speaking, in our experience, financial missteps in relationships typically arise from poor communication, keeping secrets (what some call financial infidelity), control issues, blending budgets, and emotional assumptions about a partner’s motivations.

Spender or a saver?

Before you can address relationship issues that arise from ingrained financial behaviors, you must recognize whether you are a spender or a saver. Spenders frequently buy things they don’t end up using or later forget about. They also cringe when they hear the word “budget,” don’t have much money set aside in savings and, in some cases, live paycheck to paycheck.

Savers often are mirror images. They don’t especially enjoy spending money and would rather see their bank balance grow each month rather than shop for items they don’t need. Savers pay themselves first each month, either by contributing to an emergency fund, retirement account, home improvement project, or specific goal such as travel. They are perfectly comfortable delaying purchases and sticking to a budget.

Being a spender or a saver isn’t inherently good or bad. The trick is to find a comfortable balance between both ends of the spectrum.

Five common financial missteps in a relationship

Avoiding talking about money: Many couples focus more time and energy on marital milestones (i.e., planning the wedding, buying a house, or starting a family) rather than how they will handle money together. This is a mistake. Major storms could surface if one partner is a spendthrift and the other is a miser. Open and honest communication about financial goals, priorities, and, yes, anxieties, is critical to a healthy partnership — as is relaying any concerns you have about jointly handling your income.

Concealing financial infidelity: One sure way to shatter trust is to keep financial secrets from your partner. Close to half of couples (43%) who have combined their finances in a relationship admit to hiding purchases, bank accounts, financial statements, bills, or cash from their spouse or partner, according to a 2021 study from the National Endowment for Financial Education (NEFE). The survey found that when such deceptions occur, 85% of couples said it affects the relationship, “leading to arguments, a breakdown of trust, and, in some cases, separation or even divorce.”

Resolving control issues: If one partner solely controls the household’s purse strings, resentment can fester. And few things build resentment faster than one partner being made to feel inferior as a result of bank account imbalances. If you’re the person in the relationship who has more cash, you need to be especially sensitive about how you discuss spending decisions.

On the other hand, if you’re the one with less income, you need to be able to handle the related stress that can be inevitable in such cases — even if your marriage is on otherwise solid ground. We’ve seen situations in which a couple shares responsibilities for paying the bills equally and takes turns managing the household finances. Others may put one partner in charge of savings and investments, and the other pays the day-to-day bills. Another popular approach is the  “you, me, we” approach: Both partners contribute to an account that pays for joint non-discretionary living expenses (such as the mortgage, health insurance, and groceries), but each maintains a separate account for their spending. Whatever system you decide on should be decided on together, and it should be fair to each partner.

Blending the family budget: Combining finances when partners are coming off a second or third marriage can get a lot more complicated. For example, there may be real estate on both sides, multiple savings and retirement accounts, life insurance policies with different owners and beneficiaries, and, of course, kids from prior relationships. In these “blended budget” situations, you need to be transparent and leave nothing to chance. Ideally, before you walk down the aisle, sit down with your new partner to make clear what you each own in terms of assets, liabilities, and financial goals. Are one or both of you supporting a child? How will you handle joint expenses, such as health insurance, property taxes, or the mortgage? Who will pay for college?

It’s critically important to document the big-money decisions. For example, will both parties agree to a prenup or postnup if something goes wrong? In situations where there has been a divorce, the affected party needs to update beneficiaries in their will, life insurance policies, and retirement accounts to properly reflect their new marital status and wishes. In addition, estate plans need to properly reflect how you intend to distribute your assets after death. A variety of trusts can be set up to accomplish these complicated goals, but you should consult a financial professional or estate planning attorney for guidance.

Getting past emotional assumptions: Couples can often misread the motivation for their partner’s financial decisions, and this can sometimes lead to conflict. Remember that each of us brings our emotional relationship with money to a marriage or relationship — what it is, its value, and how it should be used. A policy of honest, full disclosure — and listening to truly understand what your partner is saying about your joint money — will go a long way to fending off bad feelings or mending fences when one partner may sometimes cross the line into making a bad money decision.

Don’t let finances be the reason to end a relationship

Money can sometimes derail an otherwise solid relationship and is often cited as the reason a relationship ends. It doesn’t have to be this way. Here are some ways to facilitate a conversation and develop a better understanding with your significant other about money matters:

• Create a budget

• Try to agree on what you both value

• Set reasonable goals

• Plan for the unexpected

• Envision your future happiness together

Ultimately, the money message that most couples need to aspire to can be simple: “We value spending money on what we need, but we carefully evaluate our spending on what we want.”

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.