COVID-19 has impacted our lives in myriad ways. Work, relationships and finances — the very core aspects of day-to-day life — have been upended by widespread job loss and stay-at-home orders. Couples are spending more time together. Singles, now socially distancing, are dating less (at least in person).
Due to the global pandemic, relationships have shifted: Couples and singles alike are focusing increasingly on financial stability and transparency.
In a recent Personal Capital survey conducted by The Harris Poll*, nearly 2 in 3 Americans (61%) told us that the COVID-19 pandemic has made financial stability in a partner more important to them.
This is a departure from perspectives in our 2020 Love & Money Report, when 79% of respondents told us they’re “happy and in love no matter how much money” their partner has.
Now, almost half of our respondents (49%) believe financial stress is a deal breaker. Millennials in particular (56%) agree with this statement: “The COVID-19 pandemic has made me realize that I can’t be happy in a relationship when there is ongoing financial stress.”
One way to allay the strain? Lacey Cobb, CFA, CFP®, suggests making financial planning fun.
“Turn it into a date,” said Cobb, who serves as the Personal Capital Director of Advice Solutions. “Pour some wine and put on your favorite tunes, and do this together. Start by listing out your financial goals together, whether that’s paying off debt, buying a home in five years, or going on a well-earned vacation. Once you’re both on the same page on goals, then you can start budgeting and planning towards those goals. Also, remind and encourage each other along the way to make decisions that help you get closer to your goals.”
Beliefs About Finances in 2021
Financial stress affects couples in different ways. According to our survey, however, men feel the impact of financial stress in a relationship slightly more than women. They have also noticed that they are talking more about money with their partner, and — either in conversation or in private — they’re more likely to have contemplated a prenup. However, they don’t value financial stability as much as women do.
The Paperwork of Love
Broken down by generation, Millennials, at 51%, are the most likely to consider a prenup more than they would’ve in the past.
Prenups have a bad rap. A third of our respondents (33%) say it’s never appropriate to talk about creating one. Why? Couples may believe it predicts doom to suggest a prenuptial agreement to their prospective partner. Cobb said despite it being a touchy conversation, discussing a prenup may be valuable to some couples, particularly those with significant assets, established businesses, or previous marriages. To finalize details, Cobb said these couples should speak with an attorney.
“For other couples,” Cobb added, “the conversation is more about being upfront and transparent about finances in general, such as their personal situation, goals, and views around money.”
A third party, like a financial advisor, can help facilitate a big-picture money discussion, laying out the pros and cons of various scenarios and nudging both sides to be honest about their current financial situation and their future money expectations.
How COVID-19 Impacts Relationship Milestones
Propelled by the upheaval of the global pandemic, half of coupled Millennials took at least one major relationship step sooner than expected.
One benefit (as we see it): Couples are talking sooner about money. A majority of Millennials (65%) told us that the pandemic has forced conversations about finances earlier on than they normally would have.
“We Need to Talk…”
Money isn’t exactly the most romantic topic — especially when you and your partner broach it out of necessity or due to a conflict. In these instances, Cobb recommends going into the conversation with “an open mind, ready to listen and avoid judgement.”
“It’s important both parties feel comfortable because these topics can make people feel very vulnerable,” she said. “To set expectations, it is probably best to set specific time aside to discuss instead of springing it on the other person.”
She encourages you to open the conversation with your own situation and views. “This way, it feels more like a conversation instead of an interrogation.”
Making Big Money Moves
Financial chats aren’t the only activity happening sooner than usual. Some Millennials and Gen Xers said they’re speeding up other significant relationship steps, such as disclosing debt, combining finances, and moving in together.
Still Unattached? Start Your Search Engines
Uncoupled Americans told us they want more info on their partner from the get-go. Before going on a first date, 54% Millennials say they have looked up where their potential date works. (That’s true of only 37% of people overall.) And Millennials value the result: 44% cancelled based on what they found (compared to 27% of all respondents).
Men, more than women, are interested in their partner’s earning potential:
- 40% of men (and 33% of women) say they’ve looked up where a date works before going out with them
- 29% of men (and 25% of women) say they’ve cancelled based on their employer or salary
While salary may be a key consideration for some daters, our respondents highlighted other important sticking points in long-term coupling, such as dishonesty, debt, and attitude about money. Following are the top financial no-gos for men and women.
Couples Value Transparency — But Still Struggle with Talking About Money
Honesty about money and spending is a top priority for our respondents, but they also acknowledge feeling nervous addressing the topic. In fact, nearly half of men (48%) and 44% of women agree that “the idea of talking about money with a romantic partner makes me anxious and apprehensive.”
Personal finance is just that — personal. When discussing it with a partner, it can feel vulnerable. Cobb said the anxiety comes from the unknown: how your significant other will react, how it may change the relationship, if you may uncover something troublesome.
“Also,” she added, “if you are not financially savvy, money can be a very intimidating topic. My advice would be to start by taking control of your own finances to get more comfortable talking about it. And if you have more experience on the topic than your partner, help educate.”
“Will You… Retire with Me?”
Talking through financial topics is valuable, but we found that many people are putting off these conversations. For instance, retirement is a financial goal that many people spend decades preparing for. However, 58% of people we surveyed wouldn’t talk about their retirement plans outside of marriage. Of those, 12% think it’s never appropriate to discuss post-work plans.
Cobb said that if your relationship is getting serious, to the point that you think you will spend your future together, the conversation can be more about budgeting and generally saving for the future. There are major advantages to starting earlier and utilizing various tax-advantaged retirement vehicles.
“That should be the focus: Planting the seed and getting started early in general to set yourself up for success in the future,” she advised.
Every relationship moves at its own speed. For our survey respondents, financial discussions about career trajectory, salaries, and investments are common before living together or getting engaged. Financial actions — like combining finances and creating a joint budget — are more likely to happen after marriage.
Women, it seems, are leading the conversation on financial transparency in relationships. According to our survey results, they are more likely to prioritize important financial conversations before marriage.
The Bottom Line
Money has long been a leading cause of stress in relationships. However, the COVID-19 pandemic has lobbed additional stressors at today’s relationships. In response, people are craving stability and honesty. It may be challenging to open up about money, but Cobb says it’s worth the effort.
“Staying on the same page with your partner can really set you up for long-term success in your relationship,” Cobb said. “The best thing to do is to educate yourself on how you can improve your situation and focus on the controllable. Typically a good starting point is analyzing cash flows, creating a budget, and setting a good plan for how you will stick to it.”
What Can You Do Next?
- Learn: Read up on how to better address financial topics with your significant other. Check out our resources on love and money, such as How to Talk to Your Partner About Money at Any Stage in Your Relationship.
- Talk: Communication is key. As Cobb recommended, set up your “money dates”: periodic meetings (weekly, monthly, or whenever works for you) to share learnings and ideas for money management. Just add pizza.
- Act: Whether you’re flying solo or nesting down with a significant other, you can make moves to manage your money better. Personal Capital’s free, secure online tools give you a 360-degree view of your finances. If you’ve combined finances with your significant other, you can share access to the account with your partner. Nearly 3 million individuals use the tools to budget, plan for long-term goals, and analyze their investments. Learn more about what the technology can do for your relationship to money.
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* This survey was conducted online within the United States by The Harris Poll on behalf of Personal Capital from January 14-18, 2020, among 2,046 U.S. adults ages 18 and older. Data is statistically weighted by age, gender, geographic region, education and race to ensure reliable and accurate representation of the total U.S. population, 18 years of age and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.