For Richer or Poorer: Are You Ignoring the Business Side of Your Romantic Relationship?

in Financial Planning by

Frankly, most couples would likely rather schedule a root canal than set aside time to have a frank discussion about money. For Americans, avoiding money discussions is practically built into our DNA. We’ve been raised to believe that money is a taboo subject that makes us squirm.

Is it any wonder, then, that most Americans cling to the notion that romantic love simply conquers all? One of the most striking points, according to a survey we conducted on Love and Money, which included more than 2,000 U.S. adults, is that 78% of Americans of all ages said love trumps money.

The Breakdown of the Numbers

While true love reigns supreme among both genders, it is important to a larger majority of women (83%) than men (74%), with one in four men (26%) choosing wealth over love. Additionally, true love tops wealth for 80% of Boomers compared to 75% of Millennials. Just like men, one in four Millennials (25%) favor money over romance.

Ironically, despite clear leanings toward love conquering all, more than half of survey respondents (54%) said the biggest stressor in a romantic relationship is money—and that doesn’t decline with age. According to the survey results, the older the generation, the greater the likelihood that money is considered the greatest source of stress in a relationship.

And we all know that money stressors are often cited in divorce proceedings.

What’s the Solution?

Couples often assume, as our survey results indicate, that being in love is enough; everything else will somehow work out. But there’s the romantic side and the business side of a relationship. Couples need to know if they are on the same page for both, or long-term happiness may be more elusive than they imagined.

Maybe it’s time for some honest communication about money, even if it feels uncomfortable. Overall, 57% of our survey respondents said honesty tops the list as the most important quality when choosing a significant other. This was followed by communication (32%). There were some generational differences, here, as well. Baby Boomers are more inclined than Millennials to choose honesty as a most important quality, but Millennials are the most likely to value communication. Unfortunately, both groups ranked financial security as dead last.

Asking some money questions should be part of the natural evolution of a relationship. Would you plan the rest of your life with someone before determining if they want children? Asking about money is no less important.

Money Questions to Ask Your Partner

Here are some questions to consider:

  • How much do you spend?
  • What are your saving patterns?
  • How do you approach money from a values perspective?
  • How often do you/would you like to travel?
  • What does money enable you to do with your life?
  • Do you see your future children going to public or private school?

These types of questions help you delineate your money similarities and differences. Only then can you determine if the business side of your relationship has a good chance of success.

Should You Have a Prenup?

One way to help ensure that both partners are on the same financial page is to bring in a third party. Sometimes that means developing a prenuptial agreement. Most people tend to think prenups are reserved for the wealthy, but there are many practical reasons for less well-heeled couples to explore these arrangements.

For example, Millennial couples may not have significant assets, but many bring significant liabilities to a relationship in the form of debt (e.g., student loans). Do you both agree on who is responsible for debt repayment? If one person owns a house, do you both believe the house will or will not become a joint asset?

A third party can help facilitate a complete money discussion, laying out the pros and cons of various scenarios and nudging both sides to be completely honest about their current financial situation and their future expectations regarding finances. A prenup discussion, even if a formal prenup is never created, is a valid discussion for every couple.

Day-to-Day Finances

Some other key findings in our survey determined differing attitudes about day-to-day finances, as well:

  • Millennials are nearly twice as likely as Baby Boomers to prefer their partner earns more money. They also are more inclined than older generations to agree that the partners with a bigger paycheck has a greater say in financial decisions. Do you know how your partner feels about paycheck variances?
  • More than one-third of Millennials (36%) believe they need to consult their significant other only before a purchase of more than $500, compared to three in 10 Gen Xers and Baby Boomers. Have you discussed these purchase limits with your partner?

Our Take

Successfully merging the romantic and business sides of your relationship requires knowing the answers to these types of money questions. Life can be stressful, talking through money differences can help increase the odds of your long-term success as a couple.

Learn more about Americans’ attitudes about the intersection of love and money, as well as how the sexes think they stack up when it comes to finances.

Read the Full Press Release

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Michelle Brownstein, CFP®

Michelle Brownstein, CFP®

Michelle Brownstein is the Senior Vice President of the Private Client Group at Personal Capital. She is a Certified Financial Planner with a wide range of Investment Management experience.

One Response

  1. Monique

    Michelle,
    You hit the nail on the head! It’s very difficult for some couples to discuss money especially after they’ve grown use to ignoring the topic. Asking those money questions earlier on in the dating process can definitely help determine if someone’s a financial fit for you. Thanks for sharing!

    Reply

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