Money can cause relationship stress. Here’s how to minimize tension

• Experts recommend couples engage in open and honest conversations about finances, including setting budgets, savings goals, and discussing major purchases.
• Transparency about credit scores, debt, and spending habits is crucial for building trust and avoiding financial infidelity.

Now that the emotions and thrills connected with Valentine’s Day have subsided, the tougher slog starts or resumes for many couples: Finding a way to minimize money stress in a relationship.

It’s not always easy. Financial issues have led to the unraveling of relationships for more than a quarter of Americans, according to new research from credit bureau Experian.

Sometimes, the tension shows up when one partner issues an ultimatum to the other or when one person hides significant spending from the other. Basic differences in attitudes and values also play roles. Experian says its research points to the need for more open and honest conversations rather than seeing this as a taboo topic.

Most couples say they do discuss financial issues regularly, as reported by 79% of respondents in a recent online Experian survey that gleaned answers from around 2,000 people.

Other sound practices include setting joint budgets and establishing a dollar limit, say $100 or $500, above which you agree to discuss a potential purchase with your partner before making it. Another is setting savings goals, as 93% of respondents said it’s important for them to save money as a couple.

Yet plenty of couples could do a better job of practicing what they preach, such as in communicating honestly about money. For example, 54% of Americans who admit to not being honest about money also report they fight about financial issues with their partners, compared to 29% who claim to be very honest. That’s a finding from a recent survey from BMO Financial Group. One in nine respondents admitted that they rarely or never talk about household finances with their significant other.

Plenty of research and surveys have shown that money is a top source for disagreements, which often focus on debts, different spending priorities and making big purchases without discussions, noted the American Institute of Certified Public Accountants in its own recent report.

“Communication is essential and cannot begin early enough,” said Jane Ceasor, a financial manager at Ceasor Insurance Consultants in Carefree. She suggests setting a time and pleasant place to talk openly about money once a week, such as in a park or even at happy hour.

Disputes often traced to differences in attitudes

Frank discussions about money can quickly reveal when two people linked by romance aren’t compatible in financial terms. When couples bicker, it often traces to basic attitudinal disagreements about what to do with money, said Michael Sullivan, a personal finance consultant with Take Charge America, a credit counseling and debt-management agency based in Phoenix.

When one person is a spender who likes to buy things immediately without budgeting while the other is a saver who values security and appreciates delayed gratification, it can cause problems, he explained.

“Savers like to discuss things rationally while spenders are often not comfortable engaging in serious discussions about money, preferring ‘life is short’ declarations,” Sullivan said.

When both partners are savers, they often can work out differences, he continued. But when both are spenders, they likely have major disagreements that can result in “financial infidelity,” or keeping money secrets from each other. When one person is a saver and the other a spender, the relationship might require a lot of effort and communication to iron things out, with each party trying to convince the other to change, Sullivan said.

When addictions are involved, such as gambling, drug use, heavy drinking or compulsive shopping, it makes things worse. These often involve deeper issues that can’t be fixed easily, Sullivan said.

Frank discussions are necessary

According to the BMO survey, the three financial traits that people value most in a partner include a sense of financial responsibility, a willingness to talk about money openly and a commitment to following a solid financial plan. Other favorable traits in a partner include having a successful career trajectory, a high credit score, owning a home and having a well-paying job.

Discussions about money should include a review not just of income and expenses but of assets and debts, too. Such conversations might reveal that both parties don’t even define financial and other words in the same way. Even common terms such as “saving enough” or “splurging” can have different connotations, Ceasor noted.

A frank review also should probably delve into credit reports, with all of the not-so-flattering information that could be hidden in them, possibly dating back decades. Everyone should routinely review their credit reports anyway. (You can do so for free, up to three times annually, through annualcreditreport.com.)

Sullivan considers this an important step for any partner in a romantic relationship.

“It begins with exchanging credit reports and credit scores before making a life-changing commitment,” he said. If a couple’s credit scores are more than 100 points apart (on the standard 300- to 850-point scale), the two parties should have serious discussions about spending habits and consider counseling to get on the same page, he advises.

The money discussions also should include devising a plan for paying off credit card debts. According to the AICPA, it’s usually most cost-effective to pay off those debts carrying the highest interest rates first, but retiring smaller IOUs early can give you a motivational boost.

Financial issues are central to most romantic relationships, and disputes are among the leading causes of divorce, Sullivan noted. “The money discussion is the most important discussion a couple can have.” 

Reach the writer at russ.wiles@arizonarepublic.com.