Why it’s important to have the money talk
A September survey from The Knot found that being secretive about finances or dishonest about how you’re spending your money is one of the biggest deal-breakers in a relationship.
“When we look at the data, we see that not talking about money or money-related issues is one of the leading causes for divorce,” says Kennedy. “Initiating those conversations as early as possible and trying to get ahead of that curve is very important.”
She says she and her ex rarely spoke about money over the duration of their relationship and they always dealt with their finances separately. While Kennedy was concerned about the long-term financial goals, her ex typically focused on the present.
For example, once she’d suggested they might buy life insurance to ensure they could always provide for their children just in case. But her ex didn’t see the point of preparing for something that “may not happen.”
“Had we initiated more financial conversations in the beginning, we probably would have either decided early on that we were just not financially compatible to be in a relationship, let alone to be married.”
After the divorce, Kennedy says her financial responsibilities doubled while the household income was slashed in half — on top of the $25,000 in debt she now had to repay. She made it work, but it was tough: She downsized her apartment, took public transit instead of buying a car and bartered for services she couldn’t afford, like child care.
More: 3 in 10 couples have dealt with hidden bank accounts
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How to talk about money while dating
Kennedy says she’s not necessarily encouraging people to ask a potential partner what their credit score is on the very first date. But you can bring up more general topics around money.
What you want to get a sense of is how someone views money rather than their habits, which don’t matter as much to you when you’re still getting to know someone. She suggests asking dates about their relationship with money and just seeing if they’re open to having conversations about it.
“In so many ways, money exists from the very beginning,” Kennedy adds. From deciding where you’ll spend your first date, to splitting the bill and tipping — finance can find its way into your dating life without you even planning for it.
Kennedy adds that many financial habits stem from your experience with money as a child, which could be a great conversation starter — although keep in mind it can also be a great conversation ender.
Once you’re further into a relationship, you can start asking more serious questions.
“Along with discussing upbringing, couples should discuss financial goals, financial planning, accepting each other's financial differences, different money management practices that are fair, and creating financial boundaries,” says Kennedy.
Some people may be eager to discuss money immediately, but others may need a little more time to engage. One of the most important things you can do, Kennedy says, is to approach the conversation with empathy and an open mind.
“Give your partner time to show up,” she advises. “We all come from different backgrounds, different beliefs, we all have different experiences when it comes to money.”
What are some red flags to look out for?
You can make it work with different money philosophies, but certain things should be non-negotiable. Kennedy warns you should be suspicious if your potential partner suddenly needs to borrow money or they consistently hide important financial details.
These red flags should be especially concerning if they seem as though they’re trying to live beyond their means.
However, Kennedy adds that it’s also important to be mindful of the current economic climate and how that may have impacted people’s financial situations. Living with your parents longer than usual or not owning a car and taking public transportation instead aren’t necessarily indicators of financial instability.
In fact, more and more adults aged 18 to 34 are living with their parents in the midst of a rapidly rising cost of living.
But if your financial aspirations and behaviors are completely out of sync, you might need to make the hard call and end the relationship.
“It is essential to know that some financial goals and habits can be seen as deal breakers, which is OK,” Kennedy says. “You and your partner will not always agree on everything, but that doesn't mean you have to conform to values that go against your financial morals.”
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