Why financial compatibility matters

Over my thirty years as a financial advisor, I have talked to hundreds of people, many of them in relationships with whom they have never fully discussed their financial goals.

The first thing to consider when entering into a relationship is whether you share the same financial goals.

Having shared financial goals with your partner is important because it fosters trust, communication, and alignment in your relationship.

When both partners are on the same page financially, they can work together towards common objectives, such as saving for a home, planning for retirement, or managing debt.

This collaboration reduces the likelihood of conflicts over money, a common source of stress in relationships.

It also ensures that both partners clearly understand their financial situation, enabling them to make informed decisions together.

Shared financial goals ultimately contribute to a stronger, more resilient partnership where both individuals feel secure and supported in their financial journey.

I have seen several issues arise if you and your partner don't share financial values. Left unresolved over time, conflicts and mismatched values can contribute to the deterioration of the relationship, potentially leading to separation or divorce.

Here are some of the common issues I have witnessed -

Conflicts over money

If one partner is a spender and the other a saver, their conflicting habits can lead to financial instability. Differences in financial priorities, such as how money should be spent or saved, can lead to frequent arguments. These conflicts can create ongoing tension and resentment, impacting the overall harmony of the relationship. Discrepancies in spending, saving, or debt management can lead to mistrust, especially if one partner hides financial habits or debts. This lack of transparency can also erode trust in other areas of the relationship. I have often talked to people who feel burdened by their partner's spending or lack of financial discipline.

Unmet Goals

Disparate financial values can make it challenging to achieve shared goals, such as buying a home, saving for retirement, or planning for children. If both partners are not aligned, progress toward these goals can be slow or even nonexistent. So discuss with your partner what their life goals are. For example, if one of you wants to settle down and buy a house and the other wants to travel the world in a camper van, there are discussions that need to take place!

Emotional Stress

Money can be a significant source of stress in relationships. If partners have conflicting financial values, this stress can be amplified, leading to anxiety, frustration, and a sense of being overwhelmed. Many people recount stories to me about their parents arguing over money, and because of this, they find talking about money stressful. Money doesn't need to be a source of stress if you are open and honest with each other.

Power Imbalance

Differing financial values can lead to a power imbalance in the relationship, particularly if one partner controls the finances while the other feels left out or powerless in decision-making. I have seen this so often with women who are left out of important financial decisions because they don't earn as much as their partner or when one partner controls the finances. If you are in a relationship living together, you should both have equal access to joint finances and decide how money is spent.

When I wrote my book, I included a story from a woman whose story highlighted the importance of shared financial goals and values in a relationship. Her first marriage faced significant challenges due to her husband's financial secrecy and differing attitudes toward money. This led to trust issues and, eventually, the breakdown of their marriage.

In contrast, when she met her current husband, they were transparent about their financial situations from the beginning. They worked together on financial planning, openly discussed their finances, and supported each other through challenges. Their shared financial goals and communication created a strong foundation for their relationship, emphasising the importance of financial compatibility in a lasting partnership.

Not sharing the same financial values can undermine trust, create conflict, and threaten financial stability and the relationship's overall health.

Do you agree?

It's a difficult topic on which to express your views, but if you have thoughts or experiences on this, please share them in the comments.