When we talk about stress in relationships, money is often the biggest culprit. If you and your significant other have been bickering over your spending and saving habits, it’s a classic sign that you’re grappling with the unpleasant mix of relationships and financial stress. Money problems can be unsettling even on their own, add to that the fact that not many couples can have honest, frank discussions about finances and the stress can become a ticking time bomb of sorts.
While money may not buy happiness, it impacts every aspect of your life in some way or the other. Instability on this front can not only take a toll on your mental and physical health but also your relationships. That’s why addressing financial problems in a relationship becomes imperative.
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Relationships And Financial Stress
If you and your partner struggle to find a common ground concerning your finances, you must know how financial stress in a marriage or long-term relationship can take its toll on your happiness quotient. Unfortunately, financial disputes among couples are not uncommon.
According to a research carried out in the Kansas State University, financial stress, poor communication and the disagreements stemming from it not only contribute to a decrease in relationship satisfaction but also increase the chances of divorce.
The researchers also pointed out money tops the list of reasons for conflict among couples.
Yet another study confirms that factors such as credit scores and bad debts add to financial stress in relationships, emerging as the number one cause for divorce. Another poll carried out on the dynamics of relationships and financial stress reveals that the problem may be more pronounced in couples in their 20s and 30s.
Of the millennials interviewed as part of the survey, 88 per cent said they were dealing with a financial imbalance in their lives and it was impacting their marriage or long-term relationships.
Needless to say, saving your relationship from financial stress is imperative for its success. Fortunately, there are several ways to handle this sensitive topic with maturity.
Relationships and Financial Stress – Causes
Money is often a trigger for fights and arguments in relationships. From different outlooks toward financial management to lack of transparency about each other’s financial health, there is a wide range of issues that can lead to discord in relationships.
Does money affect your relationships? It most certainly does. A 2017 study indicates that on an average 70 per cent of couples argue about money. Factor in the fact that a majority of couples today already have a debt to deal with when they enter into long-term relationships, the problem becomes even more complex.
Let’s take a look at some of the key causes of this recurring issue to help you address the ‘how do you handle financial stress in a relationship?’ question:
1. Viewing one’s partner as the source of financial troubles
According to a survey, people are more likely to attribute good financial habits to themselves while pinning the blame of mismanagement on their spouses or partners. Nearly 34 per cent of respondents in this survey claimed that they were the savers in the relationship whereas their partner was the spender. With that outlook, irreconcilable differences over finances are bound to seep into the relationship.
2. Divergent views on financial management
The same survey indicates that in 47 per cent of the cases partners have different, sometimes opposing, views on financial management. If a couple cannot agree on how to split finances, what percentage of your earnings to save each month, the best investment options and so on, there is bound to be financial stress in a marriage or relationship.
3. Lack of transparency
According to a financial infidelity poll, couples also tend to hide their financial transactions from each other. One in five participants of this poll admitted to spending up to $500 without their partner’s knowledge, let alone consent. When debt begins to pile up, such lack of transparency and undisclosed transactions are bound to contribute to the financial problems in a relationship.
4. Living on credit
Let’s say you or your partner have suffered a setback in form of a job loss or pay cut but you continue to keep up with your old lifestyle, relying on credit cards to get you by, the monetary imbalance is bound to catch up. When that happens, there is no hiding from the messy reality of relationships and financial stress.
5. Poor financial planning
You have a baby on the way. While you concentrate on making a room for this new member in your life, you don’t factor the increased expenses and possible dip in monthly earnings for the duration of maternity leave.
Or you funnel all your savings into buying a house and then take a mortgage to make up the difference without foreseeing whether you’ll be able to meet your recurring expenses on the remaining income. Such poor financial planning and hasty decisions can add stress to your relationship.
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Does Money Affect Your Relationships?
All the research, studies and surveys point to one conclusion – difference over money and the ensuing financial stress can wreak havoc on a relationship. Here are common impacts of financial stress in a marriage or relationship:
1. Financial stress adds to relationship baggage
Every relationship comes with some form of baggage. Your unresolved issues, your individual past experiences, differences in the way you approach life and situations – basically, anything that adds unpleasantness to your equation – can be qualified as baggage. For couples reeling under financial stress, the monetary woes add a sizeable load to this baggage, which slowly begins to take its toll on the relationship.
2. Resentment toward each other’s spending habits
Most people have their own style of handling money. Since you’ve gone by your methods to handle money all your adult life, it is only natural to think that your way is the only right way to do it. So, when differences in the financial management approaches begin to surface, you may start resenting your partner for it.
Maybe you’ve always bought brands, gone on shopping sprees to deal with a bad day, and trusted your money to be safe in a bank rather than an investment scheme. If your partner shops from the local neighborhood store, like to purchase extended warranties, and maintains spreadsheets to track expenditures, you may find it annoying.
At first, you tease them and crack jokes at the expense of their habits around and vice-versa. Over time, these differences and jokes can become a cause of deep-seated resentment.
3. Financial secrets erode trust
You made a bad investment and then took a chunk off your joint savings to cover your tracks. Or you bought something that you didn’t need or was way out of your budget and now your credit card is maxed out. You try to pay it off secretly.
These things do come to light eventually. When that happens, the secrecy around financial problems in a relationship can lead to erosion of trust. You hiding things from your partner becomes a more damaging act than the poor financial decisions you have made.
If these lies and secrets become a pattern, they may interfere with your partner’s ability to trust you and vice-versa. Lack of trust is a potential red flag for any relationship.
4. Compromises may lead to self-pity
Compromises on money issues aren’t always easy. When one partner has their heart set on something and the other just doesn’t think it’s a good idea, finding common ground can be hard. For instance, if you want to buy a new car or a bigger house and your partner is not on board with the idea, you can’t go ahead and buy half a car or house. Naturally, one person will have to give up their stand.
Often, such compromises can leave people wallowing in self-pity.
It becomes hard to see that your partner may also be giving up certain things to keep your financial goals as a couple on track. This self-pity can make you distant from your partner, turning the relationships and financial stress equation into a hot mess.
5. Jealousy over money can hit a relationship hard
Money can become a source of jealousy and contention even in the strongest relationships. Maybe you’re dealing with a job loss or pay cut and your partner lands a high-paying job. Or you had to take a step back from your career to take care of the family, your partner feels the burden of fulfilling the financial responsibilities single-handedly while you are struggling to come to terms with lack of financial independence.
Perhaps you are wired to worry about money but your partner has a more carefree approach. Many such factors can result in financial jealousy in the relationship. From there, it is quite the slippery slope downhill.
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How To Overcome Financial Stress On Relationships?
Talking about money isn’t romantic, passionate or sexy. Mundane as it may be, it is essential to help to understand how do you handle financial stress in a relationship.
Dr Chhavi Bhargava Sharma, a psychotherapist enlisted on our panel of consultants, weighs in on how to overcome financial stress on relationships, “Money and finances can be a major source of emotional and mental stress and can lead to strained relationships and breakups.”
She also shares five effective ways to manage the finances and the relationship, whether one or both partners earn:
1. Talk about financial management early on
Relationships and financial stress can turn into a deadly combination. This is especially because a lot of couples don’t talk about money until its already too late. So, prioritize coming up with a financial management plan, and discuss earnings and expenditure. Don’t shy away from talking finances for self, children, and parents etc.
Make financial security a joint venture in your relationship early on. This is not to say that you start talking money on the first date, or even the second. When you know you’re in it for the long-haul, a discussion on money is warranted. Don’t wait until you have moved in together or tied the knot.
2. Work on a budget
How do you handle financial stress in a relationship? The best thing you can do to negate financial woes – both short and long term – is to plan a budget according to your needs and your lifestyle. This budget should have three sections – I, You and We.
If both partners earn, they should both contribute toward the running expenses while directing a portion of their earning toward savings. Similarly, on the expenditure front, there should be some personal amount for each partner and one joint amount. Plan for today and tomorrow.
3. Keep separate bank accounts
Keeping your money separate can be a great way to negate financial stress in a marriage or relationship. This way your financial independence does not get compromised. As a result, the feelings of resentment or self-pity do not take hold between a couple. You’re both in charge of what you earn, and retain a degree of autonomy is how to spend or save your money.
That said, you should have a joint account in which you both deposit some amount each month so that the bills can be paid from a common source. By doing so, you can maintain transparency about your running expenditure, which is crucial for avoiding financial stress.
Related Reading: 15 Clever Ways Of Saving Money As A Couple
4. Work on financial literacy
Just as both partners need to collaborate and shoulder equal responsibility for managing the finances and expenditure, both need to focus on acquiring financial literacy too. If only one of the partners is financially savvy and handles all decisions about savings and investments, it can leave the other feeling insecure and uncertain.
Irrespective of whether you both earn or not, learning about investment and savings schemes and deciding which ones to adopt should be a joint effort.
5. Plan for the future but live for today too
Securing your financial future at the cost of your present can lead to bitterness in the relationship. Let’s say you want to splurge a little on a special occasion. Or your partner wants to take a holiday. But you have no money for it because you’ve invested it all. That is sure to lead to discontentment, bickering and feelings of bitterness. And soon, the blame-game begins.
It is critical to save a portion of your earnings. At the same time, you should have some extra cash in your account for that occasional splurge.
Each partner should have the space to spend a certain portion of their earning on themselves. The amount should be decided mutually. This way neither partner feels the need to hide the things they buy for themselves. This helps in ruling out the risk of financial unfaithfulness. One of the biggest reasons of stress over money in any relationship.
Sound planning and commitment to follow through on that plan is the only way to dodge the bullet of financial stress in relationships. If you’re struggling to make headway on your own, maybe it’s time to discover the power and effectiveness of couples counselling.