Financial compatibility is a significant tenet of a healthy relationship. However, you may be surprised to know what it means. Usually, people think that it’s about earning equally. But that is far from true. When you and your partner are financially compatible, it means that you both have similar spending habits, savings objectives, and attitudes towards money. Now let’s proceed to the obvious next question, which is how important is financial compatibility in a relationship.
Open and honest talks about money and how you both deal with financial issues are key to a long-term healthy relationship. If you and your partner’s views on financial management do not coincide, it can cause anxiety, anger, lack of trust, and a constant sense of fear. Let’s explore this issue further below.
How Important Is Financial Compatibility In A Relationship: A Deeper Explanation
Compatibility implies your and your partner’s ability to live together with minimal conflicts. Being compatible financially means having similar spending and saving habits. Financial compatibility involves having similar viewpoints on both large and small financial decisions. The health of a couple’s relationship may suffer if you are unable to establish financial stability in the sense that compatibility and comfort are necessary.
Manisha Thakor, a financial well-being expert in her book Get Financially Naked, defines financial compatibility as whether or not money will cause a strain in your relationship.
To find out your compatibility regarding finances, think about joint money decisions and personal money decisions. If you are more compatible with your partner in these decisions, it will cause less tension and arguments. In contrast, if your views do not match, you will quarrel more.
The Importance Of Financial Compatibility In A Relationship
According to the American Psychological Association, 31% of couples in the US fight on the topic of money. Further, couples fight more frequently and intensely over money than other sensitive subjects, and their disagreements are more likely to go unresolved. All this evidence points towards the need for financial compatibility for a healthy relationship.
Financial incompatibility manifests in one or more of the following ways:
a. Varying attitudes about money.
b. Debt due to overspending or involvement in gambling activities.
c. Faulty financial management leading to overextended budgets.
d. Low income, which results in poor mental and physical health
e. Failure to track expenses.
f. Unwillingness to talk openly about financial management and revealing crucial information like credit score.
The impact of financial incompatibility is disastrous for a relationship. Its higher scale is a predictor of divorce. The more the difference between your and your partner’s saving and spending habits, the greater the likelihood of disagreements and fights.
Financial compatibility is also crucial to prevent guilt and shame from creeping into your lives. This is because financial disparity can also lead to such feelings. The spouse with a higher income might feel bad about their position in the company and their ability to advance professionally. Alternatively, the partner with a lower income might feel bad about not making as much of an effort to support the household and might attempt to close the income gap by giving up personal preferences or needs. In any case, if these emotions are not dealt with, they may eventually turn into bitterness and fury.
How Can You Make Your Relationship Financially Compatible?
The only way to make your relationship financially compatible is to have open discussions related to money. A solid and happy relationship depends on you and your partner having honest discussions about money, regardless of how uncomfortable the subject is for you. It lays the groundwork for mutual financial goals and promotes open communication.
You must first find out your own financial compatibility. After that, discuss it with your partner. This will help you find out about red flags related to finances. Ask yourself the following:
1. Are you a spender or a saver? Despite the fact that savers and spenders may approach money differently, having this discussion can help you find things you both enjoy doing.
2. What is your financial status? You may have a loan of any kind or a credit card debt. Perhaps someone in your family relies on your finances. If you or your partner earns significantly more, you must be clear on how you or they will treat each other.
3. Do you wish to combine your finances? Some people don’t desire to have individual bank accounts and opt for a joint account. If one partner has health insurance through their job and the other does not, this question may spark a conversation about things like joint pensions or health insurance.
4. How much do you earn? While it may be one of the most complex financial questions to ask, salary sharing is crucial for many people. Speaking about how you feel about pooling money when there are significant differences in personal income levels and the relationship is progressing can help the development of your vs. mine kind of thinking.
5. What are your big dreams or goals in life? Budgeting is necessary for fulfilling major life goals, such as buying a house, raising a family, and perhaps even selecting the kind of wedding or vehicle you want. It may happen that after a discussion, you find out that you need to compromise on some things.
What Should You Do If You Love a Financially Incompatible Person?
If there are many differences between your financial habits and views and your partner, you may feel disheartened. But instead of feeling low, use these ways to overcome challenges that financial incompatibility can bring in the future.
a. Have more conversations around money and finances with your partner. Know their actual financial status and shape your conversations accordingly.
b. Become a little accepting of the spending or saving habits of your partner. This will lower the level of frustration and resentment in your relationship.
c. If your partner is a spender, try handling more money-related decisions by yourself. You can delegate them some other responsibility and take care of money matters yourself.
d. Share your personal experiences so that your partner finds out your motives for doing what you are doing.
e. Create a budget together. Establishing a joint spending plan is an excellent approach to promoting equality and cooperation within a couple.
Concluding Words
Now you know how important is financial compatibility in a relationship. Long-term stability, trust, and communication are all impacted by financial compatibility. When financial objectives and values coincide, relationships are stronger, and there are fewer chances for disagreement. Mutual understanding of each other’s financial habits, open communication, and shared responsibility are the major pillars of a strong and happy partnership.
