Almost two thirds (60%) of people believe that financial compatibility is one of the most important factors in a successful relationship, according to Scottish Widows.
But what is financial compatibility?
Like any part of a relationship, financial compatibility is multi-faceted and will look different for every couple. However, the research states that incompatibility “includes a lack of shared financial aspirations and different attitudes to spending and saving.”
Signs of financial incompatibility
You may be in a financially mismatched relationship if:
- You wish your partner was better at saving
20% of people feel this way and it could be a sign of differing priorities where money is involved. It may also signify that you see the future differently to one another, if one of you values spending over saving, you’re likely to feel the friction.
- You feel like your savings have been impacted by your partner’s spending
Being unable to reach your financial targets can be frustrating, especially if the reason is your significant other. This feeling is shared by more than a quarter (27%) of people and rises to 41% for couples who are working toward living together.
- You have a lack of shared financial goals
The feeling of taking different approaches to finances can easily put a wedge between partners. 17% of people have felt that they and their partner have different financial goals and that their relationship has been strained as a result.
Communication could be the key
A lack of communication and shared planning could be the main reason why so many people feel that their partner’s attitude towards finances is so different from their own.
The research shows that people who form relationships in later life are more likely to discuss finances from the beginning, with 34% of over-55s doing so, compared to just 8% of 18-to-34-year-olds. Furthermore:
- 11% of people do not tell their partner how much they earn
- 57% of people don’t know how much their partner has in the bank
- 25% of married people admit to keeping money separate from their spouse’s
So, more communication is necessary.
Should financial incompatibility be a deal breaker?
However, it may simply be down to a need to talk more openly and communicate with one another. It is nonsensical to expect your financial aspirations to be perfectly aligned if you have never sat down and discussed how you think money should be treated.
Catherine Stewart, retirement expert at Scottish Widows, said:
“It’s important that couples – at any age – have open and honest conversations about their finances to make sure they have an understanding of their individual longer term financial goals.
“Some people may be more inclined to focus financial conversations on big life events like buying a house, having a family, or taking time out from work to travel together. Life after retirement should also be on this list; having a good understanding – early on – of each other’s retirement goals will help to ensure couples can work towards a realistic joint financial plan.”
A meeting of minds
Creating a joint financial plan is an important step in any relationship. It could be signal of commitment, or that big changes are planned. Either way, the simple act of talking about your finances, both as individuals and as a couple, will strengthen your bond and give you the opportunity to address any differences of opinion.
Speaking to a financial planner or adviser as a couple will give you the opportunity to combine your goals with professional insight into the strategies and methods available to help you to achieve them. At Red7, we have the capacity and resources to develop a ‘joint financial plan’ for couples which factors in both common and disparate aspirations.
For more information, or to speak to a financial planner or adviser, get in touch.