Introduction
Besides infidelity, the fastest way to kill an intimate relationship — whether you’re straight or gay, religious or agnostic, married or cohabitating — is to not be aligned with your partner regarding money — how to make it, spend it, grow it, and save it.
That’s right! Money issues are indifferent to your age, gender, sexual orientation, life stage, and upbringing. And despite the material wealth and bright smiles we see on the outside, money issues affect rich couples, poor couples, and those in between.
Sadly, financial incompatibility is the leading cause of separation and divorce in North America — which is a complete shame, because it’s avoidable.
But when couples are pulling in oppos-ite financial directions, they won’t reach their financial, personal, and professional goals. This results in hurt feelings, major damage to a couple’s financial progress, and in so many cases, complete relationship breakdown.
As partners, we do our best to love, protect, and uplift our life mates. But far too often we downgrade the importance of financial security below that of travel adventures, weddings, new houses, cars, careers, and starting a family. Sure, these are awesome and deeply fulfilling dreams, but without financial security as the foundation upon which to build these dreams, you’ll become a slave to your loan, credit card, and mortgage payments.
Money issues are indifferent to your age, gender, sexual orientation, life stage, and upbringing.
Can you imagine how stressed and unhappy you would be if you and your partner ran the hamster wheel of debt for decades, never making any financial progress? Well, welcome to the lives of so many unhappy couples who are barely affording their lifestyle and blaming each other for being where they are. You know these people. They’re house rich and cash poor. They’re driving Land Rovers when they still have a landlord.
In contrast, the happiest couples are thought to be those who have high financial compatibility and work toward common goals. These couples make the most of what they have rather than focus on what they don’t have. And many of them aren’t considered “wealthy” just yet — but they’re well on their way to financial success.
No, money can’t make you and your partner happy. But having it, along with a mutual commitment to a financial plan for the future, opens doors for couples. Without money, you and your partner must accept your circumstances — both good and bad — rather than choose what’s best for your future.
Think of it this way: Let’s say you and your spouse are in your early 30s and are without children. You make a combined income of $70,000 and are working hard to save up to move to France. In France, you will both retrain for new careers — you as a chef and your spouse as a restaurateur. After five years of extremely frugal living and both working second jobs, you reach your savings goal of $60,000 together. You rent out your home on a two-year lease, purchase plane tickets to France, and off you go. When you and your spouse complete your training, job offers, as well as offers to finance your very own restaurant, come pouring in. Based on these preliminary offers, it appears that your combined income will be double what it used to be. You have many choices and agree to build a solid plan for your future.
On the other hand, imagine you and your partner are in your early 40s and have two children. Your combined income is $175,000, but you can’t seem to control your spending. As the years pass, your debt load increases. Sure, your family “looks the part,” driving nice cars and living in a fancy house, but you’re strapped and can’t afford anything but your mortgage, credit card, and car payments. Soon enough, after a brief period of unemployment, you’re behind on your monthly payments and creditors begin calling. You and your partner start having fierce arguments — worse than in years past — about money. In this situation, your choices are limited. Your family either repays what it collectively owes, which you can’t afford to do at the moment, or you’ll lose your material possessions.
Having money helps you and your partner create higher-quality options for your future. And that’s why smart couples take the time to build a plan to achieve financial success.
One-Size-Fits-All Doesn’t Fit
There isn’t a prescribed one-size-fits-all financial plan for couples. “Financial success” is defined and created by you. And you’ll know you’ve achieved it when you can choose what you want for your life.
Financial success for one couple could mean retiring at age 65 with $1.5 million in the bank, a home without a mortgage, and nice cars parked in the driveway. For another couple it could mean living and working abroad, building up a small, but sustaining, amount of retirement savings. The second couple would likely define financial success as having seen the world, whereas the first couple would define it as having enough to enjoy a luxurious lifestyle in retirement.
Neither couple’s vision of financial success is better than the other’s. As long as each couple has a plan and both partners work as a team, both couples will accomplish what they set out to do … and be happy in the process.
The Modern Couple’s Money Guide will help you and your partner develop the skills to create a strong foundation upon which you can build your own version of financial success.
Put the Past Where it Belongs
Starting today, you and your partner get to choose how you want your future to shape up, regardless of where you came from, your current bank balance, whether you’re a spendthrift or ridiculously wealthy. If you choose a healthy attitude toward money management, meaning that you use money as a tool to build your dreams, not to accumulate copious amounts of debt for a lifestyle you can’t afford, your financial foundation will become stronger, and you’ll be happier.
Certainly we have all had experiences that negatively impact our attitudes and beliefs about money. But don’t let the past be a barrier to creating a great future for you and your partner.
My early experiences with money, for example, were a mix of good and bad. By all accounts — and sociological statistics — I probably shouldn’t even be writing this book. But rather than letting the financial challenges of my upbringing dictate my financial future with my life partner, I let them fuel my passion for building financial success.
You can do the same — leave the past in the past, especially if it’s likely to have a negative impact on your future. Just learn from it. This may mean forgiving your partner for being financially irresponsible, setting healthy financial boundaries, or dramatically altering behaviours that are counterproductive to making progress on your money.
For example, you may have had a very luxurious lifestyle in a previous relationship. Perhaps you and your partner brought home a combined income of $750,000 annually. Fancy clothes, cars, electronics, trips, and houses were literally at your fingertips. But, for whatever reason, the relationship didn’t work out. Now you’re with your new love and have a fraction of the resources. He or she is a part-time fitness instructor, and you’ve transitioned into a lower-stress role as a marketing coordinator, versus your prior role as a marketing director. Your new household income is $90,000.
Is it fair to be upset with your new partner for not making as much as your previous partner? No, of course not! Your new partner is a different person with a different career altogether.
Is it wise to carry on spending as if you still had access to a $750,000 annual income? No, that would be foolish and would cause you and your partner financial hardship.
Is it fair or wise to fantasize about the material possessions you used to have? No. Living in the past will make you resentful about your current situation and it won’t change your future. The only thing that will is learning from it.
When I was growing up in Toronto, Edmonton, and Calgary, my parents had very little money due to job instability, debt, and poor financial skills.