This money assessment looks at whether you are in a financially healthy relationship by pointing out the red flags and signs of an unhealthy one. Love does cost a thing, and it can be a very expensive.
What does money have to do with love?
I know dozens of relationships and marriages that failed because the partners have fundamentally different views on money. These differences may seem cute at first but they often lead to ongoing fights and resentments. For those of us who are financially healthy and looking to retire early, our financial goal is not achievable unless we find a partner who is willing to make the same sacrifices and share the same core beliefs in personal finance.
We want to find a great partner in life. So look out for signs of financial responsibility because a fiscally responsible person is often also emotionally mature. On the flip side, nobody wants to marry an abusive person, yet money problems are emotional problems. By identifying financial red flags early, we can better identify warning signs of a looming breakup.
If you answer “yes” to two of the three questions below, then your relationship may be financially incompatible
Where do your beliefs about money reside compare to that of your partner’s? Two compulsive gamblers could very well destroy each other, but at least they are both willing victims. The questions below will help you identify whether you are in a financially inappropriate relationship.
Question #1: Do you have repeating fights about big purchases or spending?
Does one person want a wedding that the other person thinks they cannot afford? Does one person want to buy a car or house that the other person thinks is way out of their league? Big purchases are difficult decisions. But having repeating fights about money is a sign of incompatibility on core values. Couples in financially healthy relationships build clear frameworks and boundaries to resolve financial decisions contently.
For example, financially healthy couples can agree that a particular big purchase is “worth it” under their jointly shared understanding of the big picture. A big purchase can be worthwhile as an investment or when it brings them the biggest, most long-lasting joy. Financially healthy couples may also have a budget already set aside for situations like this and feel comfortable to spend within the budget.
Question #2: Do you have resentments around what you and your partner spent (or did not spend)?
One of the surest signs of having a financially unhealthy relationship is resentment. Resentment toward spending means one person find it hard to understand (or forgive) the other person on their financial decisions, and is holding onto unspoken pain. It says the couple’s financial differences are making each other feel wronged and unloved. These are strong, negative emotions that live inside us, feeding and growing. When left unresolved, resentment has the power to be all-consuming and is effective at fuelling anger.
Does not having an expensive engagement ring makes one person feel unvalued or incapable? Does your partner’s decision to take out a massive loan to buy an expensive car make you lose respect? Perhaps it is time to talk about your core beliefs in personal finance and draw a line on where you want your partner to stand.
Question #: Do you and your partner have an entirely different view of reality on your financial standing?
If you are totally stressed out about having to pay off your debt while the other thinks you guys are rich enough to take out another loan as long as you qualify, then we have a problem. Perhaps both of you are right, but you are not right for each other. Would you marry someone who never wants a baby even though your ultimate dream is to have a lot of children? No, right? Then please, for the sake of unicorns, clearly communicate your view on personal finance, and ask whether the other person wants to hop on this bus toward early retirement, or get off now.
If you answer “yes” to four of the five signs below, then your partner is a financially healthy person, a steal you should guard with all the power you have
It’s hard to be attracted to someone who is attracted to you back. It is nearly a miracle to find someone attractive and has a good head on their shoulders toward being financially healthy and financially stable.
Sign #1: He or she is not materialistic
Anyone is allowed to enjoy the finer things in life, especially if they have worked hard to earn them. But a greedy person can never be satisfied because the grass is always greener on the other side. An individual who is not materialistic appreciates what he has. She has preferences, but her desire to fit in does not compel her to spend beyond what she can afford. A person who is not materialistic has her self-worth, self-acceptance, and self-love defined from within and not harmed or boosted by an absolute or relative change in possessions.
Sign #2: He or she does not use money to express love
Naturally, we want to give our loved ones the best we can afford. But do not get fooled by the overly generous lover who showers you with expensive gifts and only expensive gifts. A financially healthy partner does not spend an unreasonable amount of money to declare undying love. A financially healthy person can express love in non-financial ways, from spending time with us, taking care of us, listening to our problems, cooking for us, to making us time-intensive, meaningful presents by hands.
Sign #3: He or she is open to talking about money, financial situations, plans, and beliefs
You should have a clear idea of how much your partner makes and how much he has in savings and debt within the first year of dating. Otherwise, one of you could be wasting time. A financially healthy person would want to share their financial information and would want to know this information from the person they are dating. A financially healthy person should feel neither overly shameful nor grandiose toward their current financial standing. Be her a multimillionaire in wealth or debt or a penniless artist, a financially healthy person has an objective understanding of their current financial situation, and has a plan and works hard toward getting there.
Anyone who is quick to avoid having any conversations about money either has a personal struggle against their financial reality or a personal struggle to trust you with that reality.
Sign #4: He or she does not go for the wallet under stress
Watch carefully at the person under duress. After a bad day at work, how does this person de-stress? Does this person go on a shopping spree, dine out for an expensive meal, or order Amazon online? Emotional spending is an issue for many of us, which is why we all need support around us. But is this person unaware of the ties between feeling deserving and buying for an immediate gratification? Financial irresponsibility is a sign of emotional immaturity.
Sign #5: He or she does not compete with friends, family members or co-workers
Peer pressure gets the best of us. But a financially healthy person is fueled by her soul, not her wallet. If someone is mindlessly buying new things to catch up with those around them, it is a sign that the person derives positive emotions from external triggers. Such a spending habit, at the most naked level, is a sign of emotional insecurity.
Assume that most people are not financially healthy
Have you heard of a cognitive bias known as the Superiority Bias? If you ask individuals whether they are above average at what they do, the majority will answer “yes.” Most people are overly confident. The same applies to people’s views about their personal finances. 66% of the people surveyed identified themselves as “savers” in a country where 76% of Americans are living paycheck to paycheck.
It is not enough that your partner says he is interested in saving money. You need to look at how he is spending his money and making hard financial decisions during stressful times. Identify early warnings signs, and pick your life’s partner carefully.