Are you making one of these common financial mistakes?
Unfortunately, these mistakes often grow bigger and bigger and result in arguments that can even result in break ups or divorce.
In today’s climate, when Coronavirus has already pushed couples to the brink with relationship tensions rising, you need to do everything you can to avoid more stress in your relationship.
Take a look at these 5 common financial mistakes that couples make. If you’re making one of them, it’s time to turn things around so that it won’t create trouble in your otherwise happy relationship.
1. Making Financial Decisions Over an Agreed Amount Without Consulting Your Partner
Have you ever heard of financial infidelity? This basically sums up more extreme examples of making financial decisions without talking to your partner. If you spend a large portion of your income on something like gambling or even an expensive hobby, your partner could grow to resent this. That’s why some couples agree to consult with the other before spending above a certain amount. When talking about this topic, it’s important to note that 54% of men prefer to make financial decisions on their own, while 67% of women involve their partner in financial planning. By learning how to talk through financial decisions, you can avoid conflict.
2. Having Different Money Priorities
If you had some extra income, would you rather save it or pay off debt? Or perhaps you’d invest it? Or maybe you’d pay part of a down payment on a house. If you and your partner have different answers to this question, it can cause friction. None of these answers are necessarily wrong, but you need to be able to agree or come to a compromise on spending priorities.
3. Criticizing Money Habits
Did you know that women’s products are 7% more expensive than similar products for men? Often dubbed “the pink tax”, this can lead to criticisms about spending. Or, perhaps one partner will see little value in their spouse’s spending on hobbies, classes, or fitness. It’s important to understand the why behind your partner’s spending habits.
4. Not Appreciating Your Partner’s Money Values
Men are more likely to take risks when investing, which a woman may see as careless. However, a man might see a woman’s being conservative as not taking advantage of possible gains. So, who’s right? Both approaches have value! A mixed portfolio with varying levels of risk can be a wise investment choice. Lower risk provides stability, while higher-risk investments have the potential to provide more gains. However, in order to work well, both approaches must be valued and understood for their benefits.
5. Avoiding Help from Experts
There are books, courses, and financial planners and advisors available to help you! Don’t go it on your own, fighting endlessly about finances. Instead, take the opportunity to educate yourselves! Books such as Parejas Felices, Cuentas en Orden, or a strategic session with a certified financial planner CFP(R) or certified divorce financial analyst (CDFA(™) who specializes in couples and families can go a long way to ending misunderstandings. Plus, you’ll set up a strong financial base that will guard you against financial stressors that may arise in the future.
It’s not easy to get everything right in your finances! But, with some awareness, education, and coaching, you can make sure you avoid these financial mistakes that couples so often make. Your relationship is worth it!
Elaine King offers workshops and coaching sessions for couples and families! Get in touch with her to organize your virtual session today.