As much as 24% of Americans break up due to misunderstandings over finance. The chemistry between mutual finance goals and relationships sometimes seems to be intriguing. You might have known your partner for decades and are planning to settle down after marriage. However, have you been practical enough to realize that money matters define the strength of long-term romance?
Even if you and your partner approach finances differently, you can still be a good match. Differences in financial habits shouldn’t be a hurdle in your relationship as long as both of you are planned and disciplined with money handling. However, financial success after marriage largely depends on the extent of common financial ground.
After all, your match shouldn’t turn out to be a deal breaker when you set yourself on your millionaire goals. In this article, we’ve discussed some red flags you should spot early in your partner. These discrepancies indicate long-term financial instability that would eventually affect both of you.
Spotting A Terrible Money Match: Look Out For These Red Flags
While relationships are romantic, talking about personal finance isn’t always dreamy. Unless both partners are financially on the same page, it’s natural to run into money problems sooner or later. Here are some red flags that will help you spot a terrible money match.
Your Partner Doesn’t Discuss Money Matters
Have you noticed that your partner is reluctant to talk about money? This is a clear sign that you are going to encounter financial hurdles in your household. If your partner is unwilling or unable to communicate about money, it’s easy to land up in a mess.
Why not set your financial goals as a couple together and devise a budget to run your household? When you discuss money matters with your partner, both of you can determine how you are going to pay for things and accumulate your retirement savings.
You have made a terrible money match if you run into frequent quarrels with your partners while discussing money matters! It implies that choosing the wrong partner can potentially throw you out of your millionaire goals.
A study reveals that around 33% of new couples aren’t comfortable talking about money. Again, 31% of the surveyed partners had quarreled among themselves the previous month over money matters. Here are a few things both of you can talk about regarding money.
- Where and how would you prefer to live ten years from now?
- How would you like to see yourself financially poised after 20 or 30 years?
- What material possessions do you frequently dream of? Maybe it’s a second home for the holidays, a luxury car, or a garden house.
- What type of lifestyle appeals to you the most?
- What activity would you engage in when you become a millionaire?
- Would you take a single or joint approach toward retirement?
Your Partner Frequently Gets Into Debt
Have you observed debt collectors frequently ringing up your partner? Poor debt management is one of the red flags in your match to look out for. Your relationship will face financial headwinds if your partner is overly reliant on loans or credit cards. Missing out a bill or two occasionally is acceptable, but getting into debt shouldn’t turn out to be a habit.
As a would-be spouse, you should have a clear idea of their ongoing debts. Maybe, both of you can come up with an upfront plan to clear off the current debt and try not to get into any further obligations.
In some states, you might be responsible for paying the debt of your spouse. In community property states such as Wisconsin, Washington, Texas, New Mexico, Nevada, Louisiana, Idaho, California, and Arizona, spouses have to share both debts and income. So, if your partner is in debt, you would end up getting into financial obligations. This might potentially throw you out of your tracks to attain your financial goals.
Your Partner Flaunts Their Wealth
This is one of the first indicators that your partner might be a hurdle to your millionaire goals. If your would-be spouse flaunts their wealth, the person is already overspending or indulging in impulse purchases. Being snobbish with money is definitely a sign of financial insecurity, and the person might prompt you to spend beyond your means.
A study reveals that the feeling that your spouse is spending money uselessly increases the chances of divorce by as much as 45%. When you equate money and relationships, lavish spending indicates a terrible money match. In case you find your partner always ready for the next round of drinks, observe the motivation that drives their financial habits. People who flaunt their wealth habitually try to impress others by being unrealistic about their financial reality.
You might try to talk out the matter with your partner and identify aspects that trigger their spending sprees. For instance, many people end up making impulse purchases that eventually erode long-term wealth.
Also, try to cultivate frugal living habits in your partner or educate the person on saving money in the household. This way, both of you can save money and consolidate your wealth long-term.
Your Partner Is Reluctant To Share Investment Strategies
As you try to discuss money matters with your partner, the person may be reluctant to share their investment strategies. This is a definite red flag, given that your partner should be cooperative when it comes to long-term wealth creation.
First, make sure that both of you share the same financial vision. With common monetary objectives driving your investment habits, it’s logical to complement each other’s activities.
To make your investment strategies realistic, share your investment knowledge with your partner. When both of you open up your financial knowledge, you can combine your financial literacy and work toward your retirement goals.
Traditionally, financial experts advise couples to open separate IRAs. This way, both of you can maximize your contributions to consolidate long-term wealth while saving taxes. Also, discuss where you plan to stack up your finances for the long run. Some of the popular accounts with high-interest rates and tax benefits include:
- 401(k) plans
- Roth IRAs and traditional IRAs
- Spousal IRAs
- Brokerage accounts
Financial knowledge is a resource, and when both partners share literacy, it benefits both. For instance, you might be good at choosing dividend-paying stocks, while your spouse might already be investing in real estate. When you try to diversify your portfolio, it pays to bank on the entire knowledge resource.
Running Out of Money Frequently
Find out whether your spouse lives hand to mouth or frequently runs out of money. Does the person live the same kind of lifestyle throughout the month? Or do they run out of money at the end of the month? Well, this can point to a sheer lack of financial planning.
Living paycheck to paycheck isn’t the solution when you plan your finances long-term. This also implies that your spouse fails to budget strategically and live as per the means. You simply need to discuss the matter and try to curtail household costs. The secret to future-proofing your finances lies in proper planning. Once you come up with a budget with your partner, stick to it, and prioritize your financial goals.
Another red flag is your partner making lavish expenses at the beginning of the month and then struggling to meet the expenses toward the end. This is a definite concern as poor money-handling habits or unnecessary extravaganza can rob both of you of your savings.
Your Partner Gets Unemployed Too Often
Well, when you plan your financial goals as a couple, both of you need to contribute toward the mission consistently. Losing a job once in a while is fine, but what if you notice your spouse getting unemployed too often? Look out for a habitual pattern of switching jobs or remaining unemployed consistently for a few months altogether. This can have serious implications for your married life in the future.
In the first place, this pattern points toward their inability to execute skills at the workplace. Unless both partners embrace progressive careers, how would you stream higher cash inflow in the coming years? Getting unemployed frequently also points to a lack of responsibility which can jeopardize your long-term financial freedom. Particularly, if you have millionaire goals defining your financial stature, you might be compelled to make a compromise.
A man’s unemployment, compared to a woman’s, is likely to have graver consequences on their relationship. Eventually, this financial uncertainty can lead to a divorce. Given that money power goes a long way in defining long-term happiness among married couples, it pays to screen your spouse’s employment status.
Your Partner Hides Financial Details From You
A study reveals that 92% of US citizens don’t hide financial details from their spouses. Although this figure looks inspirational, it implies that around 6 million citizens are not ready to disclose their financial details to their partners. If your partner also falls under this category, getting into a relationship is a big no-no.
For instance, out of the 6 million Americans hiding their financial accounts, 67% conceal their credit card accounts, while 45% conceal their savings accounts. Financial transparency is of paramount importance when you plan your monetary strategies together as a couple. So, both partners should be aware of how much each makes or owes. If they are concealing something, you’re on a poor match!
Faith and trust are two prime virtues that drive every relationship. If you catch your would-be spouse lying about their financial stature or accounts, it’s time to work on the trust factor!
Your Spouse Wants To Control Your Money
The last thing you would expect from your partner is that they want to control your money. Remember, you have been working toward your million-dollar goals with diligence. Don’t let your partner be a hurdle toward financial independence.
A partner willing to control your finances implies the person is facing problems with their own money. This is definitely a red flag in your relationship to look out for.
Around 60% of victims of domestic violence allege that their partners hurt their credit. More than 50% of the victims also attribute their job loss to their abusive spouses.
Being a single millionaire, if you notice that your partner is inclined toward controlling your money, it’s wise to avoid the match.
Beware of An Expensive Romance!
Finding a romantic partner takes time. However, so does growing your wealth over the years. Although marriage constitutes a crucial phase of our lives, make sure not to blind yourself to romance at the cost of your financial security. Financial compatibility is as important as an emotional bond in a relationship.
So, if you are in a long-term relationship and plan to settle for a lifetime, observe your partner’s money-handling habits. A few financial pitfalls can be amended, but if you find your partner habitually abusing your money, it’s wise to give the matter a second thought before you tie the knot.
What Is The Best Way of Handling Money After Marriage?
Here are some of the effective money-handling strategies after your marriage.
- Come up with a budget with your partner
- Save first from your income before spending
- Clear your debts as soon as possible
- Plan your retirement goals
- Have adequate emergency funds and insurance
What Is a Toxic Money Mindset?
You might notice toxic money habits in your spouse, which you must guard against. Toxic money habits include lying about earnings, savings and spending unnecessarily on impulse wants. An over-dependence on credit cards is also a toxic money mindset trait.
How Does The Money Personality of Your Spouse Drive Your Relationship?
Your spouse’s money personality goes a long way in which both of you plan your finances and strategize your long-term goals. There are five money personalities: investors, savers, big spenders, debtors, and shoppers. Ensure your partner isn’t a habitual big spender or a frequent shopper. This can make your relationship difficult when you’re trying to save money.
Should I Open a Joint Savings Account With My Spouse?
It is a good idea to have a joint account with your spouse for earmarked purposes. For example, you can assign a joint account for everyday expenses. You can decide upon monthly mutual contributions to this account. However, you must also save separate accounts for investments, personal savings, and tax benefits.
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