The Beatles had it wrong in their hit record, “Love Is All You Need.” Don’t get me wrong, love is absolutely essential in a relationship, but there is strong evidence and data to show that financial stress is the leading cause of divorce in this country. A study done by the University of Utah showed that couples who reported disagreeing about finances once a week were more than 30 percent more likely to get divorced than couples who reported disagreeing about finances a few times a month.
Not only that, but the frequency of financial disagreements is a strong predictor of divorce. I think many of us know or should know this, but when initiating a relationship love causes us to ignore the financial state-of-being of our relationships.
When my wife and I first met, we obviously had no interest in discussing finances. Our priority was to get to know each other as related to our desires, wants and needs of life. Finances were the last thing on our minds. That said, as I got to know her, I learned a bit more about how she views money. When we’d go out to dinner, I would tell her to order something expensive. She always asked if I’m sure it’s okay to spend that much money. I also noticed that she didn’t shop as a hobby or buy new clothes frequently. All of these subtle hints gave me a picture of how she views money.
After we got to know each other better, we began talking about the future, what our career goals were, where we wanted to live, what cars we wanted to drive, and when we wanted to retire. This discussion was more overt in nature and gave me a clearer picture of her money personality.
Because I evaluated her and she evaluated me on a number of factors, including finance, we don’t have many disagreements. Here are a few steps we took to get here.
Share Financial Records
Before we got married, we talked about and shared paperwork finances. We shared information about our assets and, more importantly, what liabilities we bring to the relationship. We both had student loan debt, but she had no assets. I was working at the time, so I had a savings account, retirement accounts and a home.
Discuss Financial Goals
We talked about what is important to each of us as it relates to our financial goals. We talked about when we wanted to retire. We discussed how much we wanted to give to our church and to charity. We talked about the type of home we would eventually buy and when we’d buy it. If we disagreed, we tried to seek some common ground.
Create a Budget Together
After we both got full-time jobs, we sat down and created a budget. We looked at our income and determined how much we wanted to save at the end of the month. We then looked at all of our expenses and determined how our spending should look each month.
Set Aside Fun Money for Each Other
We both knew we wanted to splurge a bit without any hindrances from each other. We agreed on a small amount that we would set aside each month that we could spend on anything our hearts desired. This is probably the most important step because you’ll find no disagreements with any purchases. You can buy what you want!
Be Open, Honest and Transparent
If there is something that is bothering you about your spouse's financial habits, don’t be afraid to bring it up. The worst thing to do is bottle it up inside because it will only lead to an argument down the road.
No relationship is perfect, including mine. However, if you align the financial piece early on in the relationship, you will notice fewer disagreements about finances. It will become automated.
When you get to that point, then maybe love really is all that you need.