Buy online
You love your partner, but are you a good money match? Having similar money values helps build a stronger relationship and you will you avoid money fights, most of the time anyway! We looked at why financial compatibility is so important in a relationship and how to navigate any money differences you and your partner have.
The same money values
When you are financially compatible, you and your partner share similar money values. For example, you agree to live within your means and budget accordingly and you save for big expenses.
Life together is just so much easier when you agree on financial matters because there is less to fight about, and money worries are either shared or limited! However, if you and your partner aren’t financially compatible, you are more likely to fight about money. And money worries are a leading cause of divorce or separation. They can also leave one partner in debt, and worse, one partner being liable for the debts of another!
Are you financially compatible?
Answer these six questions to see if you and your partner are a good financial match.
Do you stick to a budget?
A budget is a personal finance must have. It guides how and what you spend your money on and is key to helping you and your family live within your means. If one partner sets and sticks to a budget and the other spends without a budget, it will put a strain on the relationship.
Do you like or loathe debt?
One partner may use credit to the maximum for big and small purchases and is happy to pay the minimum amount due every month, without any real plans to pay off debt. His or her other half however, uses ‘good’ debt to grow their wealth, such as a home or business loan. But they also aim to pay the debt off as soon as possible and don’t take on debts for non-essential items.
Do you both save and invest?
If you both save, you are more likely to be a good financial fit. For example, you share financial goals such as saving for a new car, education costs for family, holidays and retirement. Of course you may also be saving for different goals, but as long as you both save and for some similar reasons, you are financially compatible.
Are you okay with living a frugal or modest lifestyle?
If you both want to live within your means and are happy to spend only what you need on cars, clothes and home furnishings (including TVs!) you are a good financial fit. But when one partner chases a flashy lifestyle and overspends on the latest designer sneakers, the big screen TV, as well as a top of the range +R1 million car, you are headed for disagreements! And, if you cannot afford designer items, you are headed for debt as well.
How will you teach your children about money?
Children learn about money from their parents – what they say and what they do. Do you have a plan to introduce your kids to money that you agree on, such as how and when and how much, pocket money they will get? Are you both willing to teach your children about the value of money, as well as how to work to earn it, such as doing small chores around the house?
Do you share the same views and goals on short and long-term investments?
If you are financially compatible, you both agree on the need for an emergency fund that you only use in emergencies. You also are both committed to and/or have started saving for long term goals such as a house, car, education costs and retirement. In addition, you share similar views on where you should invest, such as keeping emergency funds in a savings or money market account and using unit trust account or ETFs for long-term goals. When you disagree on the need to have an emergency fund, and/or where to invest for long-term goals, your investments could become a source of money fights.
Answer yes to these questions and you are a good financial fit! Answer no, or have very different ideas, and money could be a reason for relationship woes!
Your options when you aren't financially compatible
20 000 South Africans got divorced in 2022. Financial stress and disagreements are one of the most frequently mentioned causes of a relationship breakup. Before your respective money management styles ruin your relationship, consider a few ways to manage financial differences.
Be open, honest and non-judgemental when you share your financial goals and money management style. Avoid criticising money values or goals different to your own.
Be prepared to compromise - you may need to, if you want to keep the financial peace. For example, you may want the cheapest model car while your partner wants top of the range. Compromise on a mid-range model, as long as it doesn't put you under any financial strain!
Be clear on money habits you won't accept. If too much debt is going to be a deal breaker for you, for example, stand firm. Tell your partner exactly what you think and feel.
Agree on money roles. Will your relationship benefit if one partner is in charge of certain money matters, such as the budget and investments? Or will this frustrate the other partner? If one partner has expertise in one area, that could be their role, or you can agree to share the load and work out your finances, from the budget to investments, together.
Agree on a financial legacy. When you agree on what financial legacy you want to leave you have common ground and will have less to fight about. For example do you want to create generational wealth for your family, like a paid off family home.
Get help: A financial adviser, wealth coach, counsellor, or even a senior family member or pastor, can help you negotiate your money worries, and find ways to become more financially compatible.
Be happy
South Africans have had many challenging money months recently, with high interest rates and a high cost of living. This has added to the financial stress couples face, leading to many more disagreements about money. Financial compatibility is now more important than ever for a happy relationship! You might not be in 100% agreement on everything, but when you and your partner find common money values your relationship is stronger. Your family will benefit too, learning from your example on how to deal with money as a couple!