Dear Moneyist,
I work in finance and, even before working in the field, I had a strong interest in personal finance. I carry no debt and, while I know it can’t stay that way forever, I’m doing my best to maintain that for as long as I can.
I live with my girlfriend in a house she owns and we have our fixed costs broken down amicably. She does not share my affinity for finance.
When I moved in, I suggested she save the money she would theoretically be spending on the bills I now pay, to finish her basement. She keeps going back and forth and now wonders whether she wants to finish the basement at all. Instead, she floated the idea of taking out a loan to complete the project, and I almost fell out of my chair.
More recently, I incentivized her with a special getaway if she paid her car off at least six months early. She is nearly there, and I am excited to take the trip. But when I suggested she roll over the money she had been paying toward the car to her student loans, she scoffed.
My reason: She wouldn’t really miss the money. It would save her years on her loans and tons of money in the long run. She said that she would rather save the money for a house, which we would like to buy together when the time comes (read: after an engagement).
Although we have a general idea/understanding of each other’s spending, etc., and make similar amounts of money, she does not think it’s necessary to do a deep-dive on each other’s finances until we are engaged.
She has told me in the past that she wants me to handle this area of our relationship, but has also told me she doesn’t want to combine finances. She said that she might reconsider if we were to have kids.
I know the statistics and influence finances have on marriage, and also know people aren’t going to change once they’re married. So, I guess my question is this: Are these major red flags or is it just a matter of financial literacy? If it’s the latter, where does one begin to teach?
Confused in Pennsylvania
Dear Confused,
Studies show that couples that manage their finances together and maintain joint bank accounts have a happier marriage with less conflict. “They’re more likely to feel like they have a say, an influence, in their relationship and that empowerment piece is actually what’s influencing the relationship outcome,” Ashley LeBaron, a doctoral student in the Norton School and Consumer Sciences at the University of Arizona, wrote in a study published last year.
You could probably replace managing their finances with any form of cooperation — choosing wallpaper, movies, Netflix NFLX, -3.11% shows, whether or not to opt for Apple AAPL, -1.49% or Samsung SSNLF, +0.00% — and you would find the same result. Couples who work together, stay together. We all have different communication styles and people often go to therapy to figure out that they want different things in life and have different goals, and seek compromise.
Also see: Millennial couple in Kansas needs help making ends meet on $500,000 a year
You’re right to believe that fiscal responsibility leads to marital stability. Approximately 59% of couples cite financial problems as playing “somewhat” of a role in their divorce, a 2017 study from Experian concluded. One-fifth said financial problems played a “big” role in the divorce, and more than one quarter said their spouse’s credit score specifically was a source of stress in the marriage. Financial literacy and planning is hugely important in marriage and life, I agree.
Recommended: I’m engaged to a ‘money monster’ who racks up parking tickets and credit-card debt
There’s another, equally concerning issue here. You have different financial styles, sure. But your girlfriend owns her own home and wants to spend/save her money in the way that she sees fit. It’s nice that you treated both of you to a vacation, but ultimately you may be setting yourself up for a long road of frustration by trying to create incentives for your girlfriend to bend to your will. Listening is important too. When she expresses her wishes, believe her.
She will make her own mistakes, and so will you. She’s an adult. She’s your partner. She’s her own person. She’s not your charge. Go easy on the financial back-seat driving. You can both take financial-literacy courses together. As with any other activity, whether it’s exercising or losing weight, it’s usually better to embark on such ventures as equals. We all have different financial styles. Your girlfriend’s approach has gotten her this far. I expect she’ll continue to trust her gut from here.
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