Avoid Financial Problems in Your Relationship (Part 1)
Is your partner a financial match? Find out in this two-part series starring Carol Pepper and Camilla Webster, authors of the new book The Seven Pearls of Financial Wisdom.
Laura Adams, MBA
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Avoid Financial Problems in Your Relationship (Part 1)
by Laura Adams
Did you know that women control more than half of all wealth in the U.S.? In the new book The Seven Pearls of Financial Wisdom: A Woman’s Guide to Enjoying Wealth and Power, Carol Pepper and Camilla Webster give women invaluable advice about how to manage both their money and their lives.
Today, I’m excited to have Carol and Camilla as my guests in this special two-part series where you’ll learn strategies to find the love of your life, who is also your perfect financial match.
And guys—don’t feel left out because there’s plenty of financial wisdom here for you, too! By understanding the female perspective on dating and relationships, you’ll know exactly what do and say to attract the partner of your dreams.
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Exclusive Excerpt from The Seven Pearls of Financial Wisdom,
by Carol Pepper and Camilla Webster
One of the best ways to insure a happy partnership and a secure marriage is to make a great financial match.
By this we don’t necessarily mean marrying a wealthy man—rather, we mean finding a partner whose financial style works well with your financial style. Often, women are swept away romantically and fail to take a hard look at financial compatibility before marrying or moving in together.
Here, we will discuss strategies to evaluate your financial compatibility long before you get to the engagement phase of your relationship. Getting to know each other financially will only strengthen your love. Since 60% of divorces are caused by financial problems, it is critical that you work out money issues before you marry.
Know the Kind of Financial Partner You Want
If you are looking to get involved in a serious relationship, we advise you to first think about what you want your partner to bring to the table financially even before you begin dating.
It is important to have a vision of your preferred marriage and family setup. Do you envision both of you working, or do you want to stay home to raise children? Do you want to be the main breadwinner while your husband raises the kids? Do you want to be PONC—Pets Only, No Children—and use your income to travel the world?
It is important to find a partner who shares the same basic life goals in order to be happy. It will not work to try to convince an artist or a stay-at-home dad type of man to become the sole breadwinner, nor will you be happy if you want to be at home and your husband expects you to bring home half the household income.
Being honest with yourself on these crucial lifestyle choices is the first step. Early in the dating process, you need to discover the goals and dreams of your date, to see if they can match. If they can’t, it is better to determine this early and move on, before you become too attached and then try to rationalize away these key differences.
Assuming that you and your date are looking for the same type of long-term relationship, the next step is to evaluate his basic financial habits in the early stages of dating.
Here, we’ll focus on five top traits to evaluate:
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personal financial management skills
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financial integrity
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financial realism
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financial style
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financial negotiating skills
As you evaluate your potential mate, look at your own habits in these areas. You cannot expect to be attractive to a man with good financial habits if yours do not add up as well.
Personal Financial Management Skills
Long before you met your man, he developed personal financial management skills, and you will quickly see them in action.
On the most basic level, is he a responsible individual? Does he support himself financially, or is he still living off his parents? Does he have a job, or is he in school, working toward a degree? Is he able to handle the expenses of a place to live? Can he handle the expenses of a car and/or his monthly commutation ticket? Does his life seem chaotic? Is he always in some kind of financial jam?
If so, he may have very poor financial management skills, or this may be a red flag that you are dealing with an addict or a con artist, as we discussed earlier in this chapter.
On the other hand, if he is able to manage his own life financially, chances are good that he will be a good financial partner and you will be able to manage finances well together. To get a little more information, you can ask him whether or not he does a budget every month, and compare how you both go about tracking expenses. This will also give you a great deal of information without prying too deeply at the beginning.
Financial Integrity
The next thing to try to evaluate is financial integrity. You want to partner with a man who meets his financial obligations honestly. You can find out some things about this by asking questions.
How does he feel about paying taxes—has he filed every year, or does he boast about not bothering to pay or cheating the government? If the latter, this is a huge red flag.
Does he pay his credit card and other bills, or is he constantly being declined when he tries to make purchases (or, worse yet, does he ask you to whip out your card)? Does he boast about scamming his company by filing false or padded expense reports?
Many of these behaviors can be the signs of a dangerous sociopath. If he doesn’t display financial integrity with others, he won’t display it with you.
On the other hand, if he seems to be extremely honest and conscientious, you will be in good hands and will be able to build a life together. It goes without saying that you must also have financial integrity, or an honest man will not be attracted to you once he learns the truth about your lack of values.
Financial Realism
It is critical that you observe a healthy attitude of financial realism in your man. His spending should not outstrip his means, and he should not carry a heavy load of debt.
If a man insists on a lavish lifestyle that he cannot afford, he may be extremely insecure and out of touch with financial reality. His desire to impress will only lead to ruin, and if you marry him you will be responsible for the many debts he continues to accumulate.
It may not be easy to evaluate whether a man is living beyond his means in the early stages of a relationship—it may only be possible to discover this at a later stage of commitment, when more financial disclosure is customary.
However, if you know he has a relatively modest job and he exhibits a fancy lifestyle, beware. It is also good to have big dreams, but if a man only dreams and pines for a millionaire lifestyle without working for it, you may be saddled with a disgruntled husband who will never be happy with what you can both realistically achieve. This can make your marriage a grim affair.
Financial Style
Another thing to evaluate is whether you like your partner’s financial style. Do you think of him as cheap, or do you find him generous?
These impressions can be very subjective, and what one woman may think of as incredible cheapness may strike another as admirably thrifty. If you love to clip coupons and shop at consignment stores, you need to find a man who also places a high value on frugality.
If you love to stay at five-star hotels and tip generously, you need to find a man who agrees with your approach to spending. Many power struggles can be avoided by paying attention to how the two of you handle money, and whether you have similar spending habits.
You will be able to learn more about a man’s saving and investing habits as the relationship progresses, but his spending style will indicate a great deal about his approach to money early on. This trait may not be a deal breaker, the way financial integrity or financial realism is, but differences in financial style can cause a great deal of friction in a long-term partnership or marriage.
Financial Negotiating Skills
As soon as you start dating, you and your man will be entering into financial negotiations. Who will pick up the check on the first date? How about after you have been dating for a month or two? How about after six months?
As your relationship progresses, there will be more and more opportunities to discuss who is paying for what. Some women are traditional and expect men to pay for everything; others feel more comfortable and more independent when they share half the costs.
Some women far out earn the men they date and want to pay for lavish vacations their men could never afford. All these situations require communication and negotiation. Ideally, you will both be able to discuss finances in a civil manner and come up with a system that works for both of you.
Red flags to watch out for include the passive man who pays but acts resentful, manipulating you into paying without having an honest discussion about it. You should also avoid the bully who feels he owns you because he has paid. You need to keep an eye out for the gold digger, who never contributes anything.
Even assuming your financial styles match, financial negotiating is a crucial skill you will need to make a long-term relationship work.
Tune in next week for part 2 of this series on finding your perfect financial match!
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How Marriage Affects Your Credit Score
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.