Money in a Relationship: Does it Matter?

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Does it really matter how much your partner makes compared to your salary when dating? People expect their partners to make just below $30,000 per year, according to Western & Southern Financial Group, which is lower than the median annual salary of $37,522, according to US Census Bureau data.

So, the short answer is, “Yes, money in a relationship does matter.” The longer answer is that even though it matters, people don’t expect their partners to make these skyrocketing salaries. Instead, they expect them to maintain a bare minimum amount so that they can live independently without too many expenses. 

You might feel shallow when you factor in a potential partner’s income. However, it’s one of several financial factors you should consider, even if it’s not the most important one. 

When it pertains to dating, everyone has their dealbreakers. Some despise people who chew with their mouths open, and others draw the line at people who cough without covering their mouths. But is income a dealbreaker? If it is a dealbreaker, are you considered shallow? Is income something you factor in when deciding if a person is right for you?

In an ideal world, people tend to think that money in a relationship shouldn’t matter regarding whether or not you pursue someone. But in the real world, people have bills to pay. 

In other words, no matter how much you love someone, you don’t want to be homeless because you can’t afford to pay your rent. 

We’re not saying you should set a hard line on how much a potential partner needs to make for you to even think about getting involved in a relationship. A person’s income is only one factor out of many that you should consider. But even more essential is what a person spends their income on, regardless of the amount they make.

It Doesn’t Matter Who You Are. We All Have a Relationship with Money.

Even if you say money isn’t a factor, that’s still considered a relationship. Unless you’re a hobo who lives in the Adirondacks, money is essential to your life, and you have some relationship with it. It’s the same way you have a relationship with your partner or family. 

The relationships with your partner, family, and even friends will impact each other in one way or another. If you decide to ignore them, the impact will be negative. The same rings true for money.

Unfortunately, finances and income are significant reasons why couples fight and are still the number one reason for a breakup or divorce. 

This is precisely why money in a relationship should be discussed. As much as we’d like to say these financial conversations don’t matter, they certainly do

Money in a relationship is a taboo topic that we try to avoid, but unfortunately, not discussing it before committing to someone is a huge mistake. 

Take time to decide what money in a relationship means to both of you. Is it for security, status, indulgence, or fun? What’s important to spend money on, and what are some material items you can do without? Do you need a financial cushion to feel secure, and if so, what amount would put you at ease?

What are your priorities? Do you want money for nicer vacations, or is having a big house at the top of your list? How would you cut back on expenses if one of you lost your job or your investments took a hard hit?

Whether It’s Money, Marriage, or Love, It’s All Complicated.

You may try to avoid it like the plague, but we got news for ya; money in a relationship is going to be a factor—and a big one—whether you like it or not. 

Determining who you want to spend your life with is complex and requires a person to consider many factors, including finances. It’s not like a romantic comedy when it’s all about someone sweeping you off your feet. It takes much more than love to create a robust and long-term relationship.

Don’t get us wrong, caring, attraction, and love matter, but they aren’t the only things needed in your relationship. You must also have life goals and core values and be on the same page financially. 

Even if you don’t want to take a person’s income into account, you still need to consider whether you both are compatible with money. When you spend your life together, you make all types of financial decisions, both minor and major.

Some people rightfully see marriage as a business relationship as much as a romantic one. Too many people don’t understand or realize this or let it go over their heads because they’re in love. 

Marriage involves many factors, including:

  • paying for daily living expenses
  • the expense of raising children
  • saving for retirement
  • inheritance
  • home ownership
  • insurance
  • financial emergencies
  • student loans (if any)
  • eldercare later in life
  • family emergencies

These are just some financial aspects of a long-term cohabitating arrangement or a marriage.

Most dating experts agree that you need at least some sense of your significant other’s earning potential. Your financial future is going to be wrapped up with this other person, so if you’re wise, you’ll be attentive to their current income and the likelihood of their earning potential.

Fortunately (or unfortunately, depending on how you view it), your financial security depends on it.  

When you plan for your future, it means you must be able to factor in future earnings. If your and your partner’s plans don’t match, that’s a topic you’ll need to discuss. While it may not be a dealbreaker, you may need to amend your plans. 

Not Considering Earnings, How Much Does Your Partner Spend?

Let’s be honest; a potential marriage partner can ruin your good credit. You may have a spouse who spends more than you can afford. This spending behavior can undermine an otherwise solid and healthy relationship. Even high earners can spend more than they make.

At best, it’s a burdensome situation. However, at worst, this behavior can cause financial ruin. With ordinary incomes, overspending may lead to conflict. On the other hand, someone who is frugal and never wants to spend can make you resentful and constricted. 

Here’s one thing you shouldn’t do; look at income as the only factor to consider when choosing a mate–or even the most crucial aspect. Even those with higher incomes can destroy their financial standing if they spend well beyond their means.

Some experts believe that income matters less than being on the same page regarding habits and goals.

People who make tons of money have conflicts if the cash isn’t going toward things they both agree on. 

This is why you must align yourself with your significant other about what you’re saving for and purchasing.

High earnings are great, but it’s not the tell-all, end-all of a relationship. What’s more important is how an individual balances saving vs. spending. 

When it Comes to Money in a Relationship, Ask Questions

You’ll need to answer two important questions to determine a person’s relationship with money outside of their income.

  • Do you have a budget?
  • What are your long-term financial goals?

You should understand how your partner relates to money and if they have a budget. The following are follow-up questions to ask:

  • Do you have money in a savings account, or are you living paycheck to paycheck?
  • Do you know what you spend monthly, or do you spend what you earn and wait impatiently for the next paycheck?
  • Do you pay yourself first?
  • Do you put money aside every month into a savings account?
  • Do you invest?
  • Are you invested in a company 401k plan?

You may also want to discuss their financial goals to see if they are similar to yours. When your goals differ, it’s not a good sign for the couple’s future success.

This may sound like a lot of information, but that’s because it is. Finding out this info sooner rather than later can save you a headache. 

If you find these discussions too challenging, visiting an objective third party, like a financial advisor, may be best. It’s an excellent first step and is worth the time and effort to ensure you know the mindset of your future partner.

Whether it’s good news or bad news, it’s always best to know the situation upfront. This way, you can make any financial adjustments together. 

You Can’t Do Something You Know Nothing About

Your partner isn’t psychic, and neither are you. The only way you can act is with factual information. You’ll need to talk about the M-word sooner or later and spill all the tea on some cold, hard numbers. 

As early as possible in the relationship, find out about this person’s relationship with money. What’s their credit score? What are their spending habits? How much debt do they have? Do they know anything about managing money? Once you walk down that aisle, these questions are legally your issue. 

Once you determine how your partner handles money, you can decide your next steps. If their spending habits are on point, you won’t need to make many changes. 

However, it’s common for people put off their wedding until one partner gets their finances straight. It would help if you got honest with yourself.  

Couple talking about money in a relationship.

For example, is your partner willing to make changes if their spending habits or credit is less than stellar? Are you ready to pay a higher interest rate for a house or a car loan if your partner’s credit sucks? 

Sometimes, if your partner’s credit is terrible, it’s easier to put just your name on a lease or the mortgage because the interest rate will be lower than if their name was on it. 

Unfortunately, you assume all the financial responsibility, so if the relationship tanks, you’re left holding the bill. These are all things you must think about when you join finances.

Financial struggles can impact your life negatively. Of course, some situations are out of your control (health issues, natural disasters), but you should know the factors within your control before saying, “I do.”

Can You Divide Up Your Living Expenses?

If you’re used to or expect a particular lifestyle and your partner’s lower income makes that goal unattainable, be sure you’re OK with that. 

Sometimes, there’s a significant income disparity between a couple. If you are the higher-income earner, be sure you’ll be content making bigger contributions to your household finances. When you have to support a partner against your desire, it can cause major resentment and tension about money in a relationship. 

On the other hand, if you’re the lower-income earner, make sure you can accept that your contributions will be less toward the household finances. 

This is where gender roles come into play. Although the roles are changing, most men still feel uncomfortable when women make more money in a relationship than they do, especially if the amount is significantly higher. 

Communicate with your partner about how you’d like to divide your living expenses. Early in your relationship, it’s more acceptable for each person to pay for half. However, in a long-term relationship (and marriage), you’re in this for the long haul, so you need to be equal partners, even if there’s a difference in income. 

Consider Joint and Separate Accounts

Some financial experts suggest using joint and separate bank accounts. This can help couples navigate between financial independence and shared financial responsibilities. For most expenses, a joint account is suggested. These expenses include utilities and the mortgage. 

Use a smaller separate account for expenses like gifts for each other, clothes, and hobbies. 

Because you’re equal partners, each person should have the same monthly amount in their personal account, regardless of earnings. Doing so helps you work as a team for most things but also gives you the freedom to decide on individual spending options.

Conclusion

While it’s OK to choose a partner because of strong emotions, you still need to factor in finances after those initial butterflies are long gone. When you have open and honest discussions about money in a relationship, you have a much higher success rate of making the relationship work.

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