When Schwab senior financial planner Jim Kunkel began working with a newly engaged couple, he noticed something concerning: One carried a fair amount of credit card debt while the other had an abundance of cash on hand.
“They approached their finances in totally different ways, and it was quickly becoming a source of tension,” Jim says.
After helping them through some tough conversations about their respective financial values, Jim steered the couple toward a compromise: Together they would retire the debt and then commit to a set of mutually agreed upon savings goals, which included paying off any credit balances each month.
“This couple was a real success story because they began a dialogue so early in their relationship,” Jim says. That said, even longtime couples on the same page about their broader financial ambitions can disagree about how best to reach those benchmarks—to say nothing of more mundane money matters. In fact, a 2021 poll by the American Institute of CPAs by the American Institute of CPAs found that financial decisions were a source of tension in 73% of married or cohabitating respondents.
“Every couple should prioritize conversations about money, especially as they relate to shared finances and goals,” says Carrie Schwab-Pomerantz, CFP®, president of Charles Schwab Foundation and managing director of Schwab Community Services at Charles Schwab & Co., Inc. “No matter how close you are, money issues have a way of creeping into the best of relationships.”
Here are three common challenges that can upend a couple’s finances—and potentially their relationship—along with tips for resolving such conflicts in a productive, nonconfrontational way.
1. Different financial values
The conflict: At the heart of many couples’ financial conflicts is a fundamental difference in their relationships with money.
“If you grew up in a household that struggled to make ends meet, for example, you might be a staunch saver because you know what it’s like to go without,” says Joanna Heckman, a Certified Financial Planner™ professional with Schwab. “If your partner grew up in a free-spending family, on the other hand, he or she might feel frustrated by a more frugal lifestyle.”
Likewise, some people are perfectly comfortable taking on debt, while others resist it, which can create conflict when it comes to buying, say, a new car. “When your values differ, you’re more likely to be at odds when it comes to making even relatively small financial decisions,” Jim says.
The resolution: “A successful financial plan can be a tool to encourage a couple to meet in the middle,” says Jim. While you and your partner don’t have to be equally involved in your finances, you should both know the big picture—things like net worth, cash flow, debt, insurance, investment accounts, retirement savings, and estate planning.
Along with examining the hard numbers, creating a plan frequently reveals deeper questions about your goals as a couple and how money can help you attain them. Start by probing what past experiences may be influencing your partner’s approach to the present.
“The key is not only to listen but to be receptive to the other person’s perspective,” Joanna says. From there, you can dive into where your values align, where they differ, and how you can leverage your separate views for the good of your shared finances.
“Finding common ground is almost always the quickest way out of a conflict,” Carrie adds.
See more Onward articles.
2. Income inequality
The conflict: When one partner earns significantly more than the other, it can trigger feelings of entitlement, inadequacy, and resentment—none of which makes for a harmonious relationship.
“A lower-earning partner often feels guilty for spending money, even when it’s on something for the household,” Jim says. “Conversely, a higher earner might feel entitled to spend more because they earn more, potentially fueling feelings of second-class citizenship for their partner.”
The resolution: Start by acknowledging the disparity and its causes. “As we all know, hard work and income don’t always go hand in hand,” Carrie says. “A teacher might work as hard as a CEO, and acknowledging that fact can go a long way toward keeping the peace.”
Also consider contributing toward shared expenses in proportion to your incomes. “If one partner earns 25% more than the other, for example, he or she could contribute 25% more toward your household expenses,” Joanna suggests.
Finally, consider making a list of all the ways you and your partner contribute to the relationship and the household. “Your partner’s value is more than the sum of her or his income, and so is yours,” Carrie says.
3. Financial infidelity
The conflict: According to a 2018 Harris Poll conducted for the National Endowment for Financial Education, 41% of American adults admit to concealing certain purchases or lying to their partners about debt. The reasons range from protecting privacy to embarrassment to fear of disapproval. “
This is a particularly difficult conversation to have, but once all the details are on the table, you can explore the ‘whys’ behind your or your partner’s actions,” Carrie says.
The resolution: Whether it’s about an extravagant purchase, a large debt, or someone dropping the ball, focus on resolving the problem at hand and not repeating it in the future. “Getting to the root of such actions is generally more productive than leveling accusations,” Jim says.
Having an unbiased moderator can help mediate the discussion and arrive at an agreeable outcome. “People tend to be on their best behavior when they meet a financial advisor, which can help take some of the emotion out of the discussion,” Jim says. “When you’re working as a team, it’s a lot easier to accomplish your goals than by working on your own.”
Act with intention
Moving forward, agree to talk things out as soon as either of you has a concern. “If you let things build up, they’re more likely to blow up,” Joanna says. “And money matters, in particular, tend to compound rather than resolve themselves over time.”
For most couples, having frank conversations with the help of a financial professional can provide a strong foundation for tackling even the toughest topics. Also recognize that many financial conflicts won’t be resolved in a single sit-down. “The important thing is to keep communicating,” Joanna adds. “These are rarely one-and-done conversations.”