Learn how to start the money conversation and turn your relationship money problems into opportunities for growth
You’ve seen the statistics. Nearly half of all marriages end in divorce and money is the number one reason couples say they argue.
It’s not only when our money problems get to this point. Money can be a constant stress on our relationships whether it’s those romantic relationships or with our friends.
What if it didn’t have to be that way? What if money didn’t have to be a taboo subject or what if the money conversation didn’t have to be an instant argument?
This exclusive interview with money relationship expert Sarah Li Cain will help you talk about money with your partner and turn financial goals into something that can help your relationship grow.
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How Does Money Affect Our Relationships?
Joseph: Like so many people, Sara learned about how money affects our relationships the hard way. The end of a relationship left her homeless, jobless and with over nine thousand dollars in credit card debt.
But she was able to turn all that around by learning how our personality and money problems affect our lives and the ones around us. She's written The Authentic Budget: How to harness your personality to manage money like a pro.
Sarah thank you for being with us today to talk about money and relationships.
Sarah: Well, I appreciate having me on. I love talking about this topic.
Joseph: And it's such an important topic. We've talked to other guests about how our money controls us and is such a huge influence on our lives. We don't learn anything in school about how to manage money or how to manage money in our relationship. What are some of the ways that money drives us apart and affects our relationships?
Sarah: One of the ways that money affects our relationships is when you have two competing values when you come together in a relationship. The classic spender and saver problem.
Let's say you grew up being really frugal and that's your value and your spouse or your partner loves to spend. When you come together and you have these two really competing budget or money management systems, that's where you’re going to get the clash.
How to Start the Money Conversation in a Relationship
Joseph: I love that it’s not necessarily that you’re different types of people and you can’t reconcile these money differences. It's not like you meet the person of your dreams but they’re a spender so you have to walk away.
You do however need to understand these differences and be ready to talk about them.
I think a big reason money ruins so many marriages is that because people just wait until it's an argument to talk about their finances. What are some ways that people might be able to start that money conversation without causing an argument or start it before it becomes an argument?
Sarah: One of the things I always really advocate is having conversations about life goals because at the end of the day your money is to help you enhance every aspect of your life. If you start talking about a vacation you want to go on, or maybe a target retirement date, or a house that you want to buy if you are looking at houses then you’ll naturally start talking about money but don’t have to start the conversation that way.
Naturally this leads to conversations about how much the home costs, how can we afford a down payment, those have to naturally come into our daily conversations.
Second here is don't think of money conversations as a scary defensive thing. I think money unfortunately still is a very taboo topic for a lot of us. Having small conversations often is going to help and it could even be, “Hey, I brought home a bottle of wine. It cost me five dollars.”
That's talking about money. Then you can gradually talk about the bigger stuff, right? As long as you're practicing talking about money in any way then I think that's a really great way to talk about it with your spouse or your partner.
Joseph: I love that because, like you said money is such a taboo topic sometimes. If you frame it as life goals, obviously money is going to work into that but you're not necessarily talking about how you’re spending or how you’re saving. You're still having that money conversation.
How Does Money Affect Our Friendships?
Joseph: So much of how we talk about money is how it affects our romantic relationships that we forget that financial problems can ruin our friendships as well. What are some of those ways that money and our friendships mix?
Sarah: A really obvious one is the whole idea of keeping up with the Joneses. Some people love to spend money and then you feel like you have to do the same. Something that I’ve experienced in the past were my friends have really expensive dining habits.
We would go out and it would be $70 or more each. That friendship was really expensive to keep because that's all we did and what happened was when I started pulling back and saying “No let's go for coffee, let's do other things,” that friendship kind of grew apart because of our spending habits.
Now I'm not saying the other person is wrong for spending that money, that's their choice. But I also have a choice in which I want spend my money as well. It's like competing values and those are the ways that friendships can be ruined.
How Do You Keep a Friend that’s Bad with Money?
Joseph: I think you've got the stereotypical ways friendships influence you. You've got drugs and crime and all the really bad stuff. But people forget that our friendships influence us in our spending habits just as much and it can be just as destructive as some of those other influences. How do you still remain friends with those people and keep your spending under control?
Sarah: I think one of the things that has been very successful for me is lead by example.
Let’s say I go out for drinks with friends, I’ll end up having one instead of four drinks. Some of my friends might say something, maybe ask if I’m broke. I’ll just say no, I just want to save this money towards a vacation or I’m buying a home.
What I found is that people really rally behind the cause and I get excited about telling them my goals. A lot of time they even get excited about their own financial goals. Some friends have even asked me to help them start saving their money.
We’re so afraid of putting ourselves out there, of breaking through those boundries like money in our friendships that we avoid even saying anything. In the end, you might scare some people away but you’ll make most of your friendships stronger.
How Can You Stop Money from Being a Problem in Your Relationship?
Joseph: I love how you turned that around. We're talking about how our friends can be negative influences on us but obviously you can have a positive influence on them as well.
Bringing it all together what are three things that anyone can do to really get started and reassess how their money is affecting their relationships?
Sarah: First is look at the numbers. Not only look at the numbers but what times you overspend. You’ll end up seeing a pattern that can tell you a lot about why you spend.
Also understand how you feel when you’re around your partner because that is going to be important to understand they are more important than the money.
Third is just to start that money conversation in your relationship. Start talking about your life goals and how money relates to them. Do this with your partner and in your friendships if you think money is affecting your friends.
Joseph: I love that. Be aware of your patterns, your emotions and your values about money. Start those money conversations before they become an argument and you'll be better off, you'll be a positive influence on your friends and have much stronger relationships.
I want to thank our guest Sarah Li Cain for her insight into money and relationships and how to start those money conversations. Be sure to check out her blog highfivingdollars.com and she’s got a new money podcast at beyondthedollar.co so check that out as well.
Money doesn’t have to be a stressful thing and it doesn’t have to ruin our relationships. Understand how you react to money problems and how you might differ from your spouse. Start those money conversations early as part of your life planning and before they become arguments. Don’t forget that money can affect our friendships as well but it doesn’t have to be the end of those friendships.