One of the most popular quotes about money is widely misrepresented. When people repeat the claim “money is the root of all evil,” they leave out a crucial part of the biblical verse they are referencing. Money by itself isn’t evil, but the “love of money is the root of all evil.” In romance, letting money come between you and the other person can ruin a good thing. Let’s take a look at three money problems that can end a relationship, and what you can do to avoid them.
1. Lack of communication
The importance of communication in relationships is well known, but when you bring money into the mix, it’s even more significant. Whether you’re talking about major spending decisions, retirement plans, or simply how to use an extra $100 in the budget this month, discussing money issues on a regular basis helps couples stay on the same page and plan a future together they both want. Starting the conversation can be as simple as sitting down once a month or once a quarter to take an honest look at how much money is coming in and how much is going out.
Unfortunately, many people would rather talk about death than money, and a surprising number of people can’t answer basic financial questions surrounding their relationship. According to Fidelity Investments 2015 Couples Retirement Study, 43% of respondents couldn’t correctly identify how much their partner makes. In fact, 10% were off by $25,000 or more. Meanwhile, 36% of couples disagree on the amount of the household’s investible assets, and 48% have “no idea” how much they will need to save to maintain their current lifestyle in retirement.
“We know couples don’t always agree when it comes to money, but we were surprised how many missed the mark on the question of their partner’s salary,” said John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity. “If gaps exist around basic questions like salary, couples might have other opportunities for improvement on the financial front, such as sorting through and tackling important issues together around the next big milestones in their lives…By taking time to engage in conversation and plan, your chances of creating a strong foundation and achieving your goals are greatly enhanced.”
2. Mountains of debt
Debt is a way of American life. Eight in 10 Americans are saddled with some type of debt. If you limit your dating pool to only debt-free applicants, you run the risk of remaining single and hopelessly scrolling through Tinder on a Friday night. However, that doesn’t mean you should completely ignore debt either. Large amounts of consumer debt may be symptoms of larger issues.
Not all kinds of debt are created equal. At least student loan debt can lead to a stronger financial future, but types of consumer debt — like credit card debt — are typically nothing but a hinderance to a financially strong relationship. If your partner is carrying around tens of thousands of dollars of credit card debt, there is obviously a serious problem that needs to be addressed, sooner rather than later. For reference, the average American household has $7,177 in plastic debt. The ideal number is zero, but if your partner is well above the average, you should know why and work on a plan to pay it off.
Credit card debt can indicate overspending problems, emotional issues, and a general lack of financial literacy that can make it hard for a couple to accomplish life goals together. Making matters worse, if credit card debt is being fueled by secret purchases, overall trust in the relationship can sink into the red and end a relationship.
3. ‘Must-have’ expensive weddings
Why do weddings cost so much money and time? I like to think so each person has one last chance to back out before tying their financial lives in a double knot. Weddings are a special event and an opportunity to declare your love to the world, but that doesn’t mean they have to cost a fortune. While the average couple spends a whopping $31,213 on a wedding, some couples enjoy the full wedding experience for much less.
Interestingly, having an expensive wedding does not cement your love in stone — quite the opposite. A recent study from Emory University finds that spending $20,000 or more on a wedding is associated with higher divorce rates than couples spending less. After studying several factors, Dr. Andrew M. Francis and Dr. Hugo M. Mialon conclude that marriage duration is either not associated or inversely associated with spending on the engagement ring and wedding ceremony.
If your partner is unwilling to compromise on any part of the wedding and “must have” the finest everything, you may want to take a good look at the person you are marrying. Are they financially responsible in other areas of life? If not, the royal wedding may be your final red flag.
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