It takes more than just chemistry to make a relationship work. Money also plays an important role, and as it turns out, people are 10 times more likely to break up if they think their partner is bad with their finances.
That's according to a new survey from insurance site Policygenius, which surveyed 2,000 U.S. adults in relationships. The study set out to observe how people handle finances with their partners and found one in five people (or 20%) think their significant other is financially irresponsible.
There are ways couples can avoid experiencing financial friction. CNBC Make It spoke to Kristin O'Keeffe Merrick, a financial advisor of O'Keeffe Financial Partners, for advice on building a strong financial bond between you and your partner.
"When forming a strong financial bond between partners, it's important to have open communication about money and each other's finances," O'Keeffe Merrick says.
While it may sound simple, O'Keeffe Merrick says money can be an especially difficult topic for couples to dig into. "It is important to be an open book with your partner — especially if you plan on marrying. Marriage is a legal merger between two people and one must know everything about the other's money — good and bad."
That's why going ahead and "opening the vault" early on in the relationship is key, O'Keeffe Merrick says. "Start sharing the good, bad and the ugly about your money."
Specifically couples should be talking about money goals and concerns early on. You should preferably do this before entering into marriage, but if you are married and haven't yet had a serious money talk, "don't stress, but do it now," O'Keeffe Merrick says.
There are many questions to ask your partner to see where you stand financially as a couple. If talking about money isn't easy, O'Keeffe Merrick suggests using the following as a checklist:
- How much debt do you carry?
- How much money do you have in savings?
- Are you saving for retirement?
- How do you think, feel and act when it comes to money?
- What are your spending habits like? (i.e. Do you tend to overspend or are you more frugal?)
- Do you stress too much about money?
"Understanding each other's money feelings is incredibly helpful," O'Keeffe Merrick says. "Remember that money is something that you will always have to deal with in your relationship. It is crucial to get off on the right foot. Communicate, devise a plan and stick to it. Rinse and repeat."
Determining whether someone is "financially irresponsible" often isn't black or white. What one person may consider to be financially reckless behavior may be completely normal to another.
Since sizing up someone's money habits is a subjective process, it's important to approach your relationship from a place of understanding.
"If you are accusing your partner of being financially irresponsible, first try to understand where your partner is coming from," O'Keeffe Merrick says. "Try to get a better understanding of how your partner was raised, what values they hold around money and how their money experiences have molded them as a person."
On the flip side, if your partner is accusing you of having bad spending habits, O'Keeffe Merrick says the same logic applies. "It is also important for you to do the same exercise and explore your money journey. Do you spend too much? Do you not save enough? There are always things we can do to improve our money status," O'Keeffe Merrick explains.
She adds that since money is something you'll "always have to deal with" in your relationship, it's imperative that you approach your partner in a fair and rational way when navigating your finances."
According the Policygenius survey, 12% of people in relationships have a secret credit card and 13% have a secret checking account. To avoid having to keep such things a secret, O'Keeffe Merrick recommends practicing transparency when discussing a need for financial freedom with your partner.
"I am a firm believer in financial independence," O'Keeffe Merrick "Therefore, I encourage my clients to be open about their own, separate accounts so that both parties are in the know."
She adds: "I've always had my own checking account and credit card. It's a personal choice. This doesn't mean that my husband and I have any money secrets."
When couples don't keep clear lines of communication open, that can quickly become "a slippery slope and generally leads to bad things," O'Keeffe Merrick says.
When it comes to married couples, and especially those who marry later in life, there's a higher potential for people to enter into the relationship with a significant amount of "money history," meaning assets or debt.
"Each party should be fully aware of each other's entire story (savings, debt, assets, liabilities) before a legal ceremony. If there is a situation where one is uncomfortable about something, you should seek financial guidance and perhaps even explore a prenuptial agreement," O'Keeffe Merrick says.
In all areas of navigating finances, whether with your partner or alone, bringing in outside help can be beneficial.
"Money communication is incredibly important in a long-term relationship. I have seen several cases of 'financial irresponsibility' that have ruined relationships," O'Keeffe Merrick says. "If you think your partner is financially irresponsible and you are having a hard time communicating about it, I suggest engaging a third party."
Above all, if you have serious concerns about the other person's financial situation, it's smart to be careful about marrying them. After all, no matter how much you care for them, marriage is a binding, legal agreement. "Remember that your spouse's debt will most likely become your debt at some point," O'Keeffe Merrick warns.
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