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Habits of financially unhappy couples

Are you a saver coupled with a spendthrift? Gayle Bryant asks how you deal with a financially irresponsible partner.

Money may make the world go around but it appears it also makes couples head for divorce.

Clinical psychologist Jo Lamble says the most common financial mistakes of unhappy couples revolve around not understanding each other’s attitudes towards money and where these attitudes come from.

“Avoiding discussions on how to manage the finances and not having a budget of any sort are also key issues,” she says. “As is one person not having any awareness of what comes in and what goes out.”

Arguing about money is the top predictor of divorce, according to US researcher Sonya Britt, who found that rather than arguing over children, sex, or in-laws, couples that argue over money are at a greater risk of divorce.

Relationships Australia also found a link between money issues and divorce in its study released last year on the impact of financial problems on relationships. The study found disagreements about money are a major cause of divorce and unresolved financial issues can lead to blame, anger, stress and intimacy problems.

Money issues in relationships come in many forms. It could be as simple as having incompatible attitudes towards finances, for example, one person is a spendthrift, while the other is a saver who despairs when they see yet another new “toy” on the credit card.

Other issues are more serious. One partner could be trashing your credit score by not paying bills on time and keeping this information hidden, while others could be committing “financial infidelity” through gambling, being a shopaholic, alcoholic, or drug abuser.

Take a team approach

Matt Garrett, Relationships Australia’s regional manager for the NSW Hunter region, says anecdotally women are generally the money managers in relationships.

“This is usually fine until other issues arise,” he says. “For example, if a woman starts earning more money than her male partner, he may take offence when she asks him to do something because he views it as her trying to control him.”

Lamble says couples that happily manage their finances tend to make joint decisions about how money is saved and spent.

“They adopt a team approach to finances,” she says. “Flexibility is built into the budget so that each person has some money that they can spend how they wish, without having to justify or defend their actions.”

RMIT University sociology of communications Professor Supriya Singh, author of Marriage Money, says open lines of communication are important.

“Not talking about money before you get married can cause problems,” she says. “Sometimes that is difficult, particularly in cultures where people have grown up not speaking about money and prefer to think things will just go according to script.”

When your partner is the problem

But what can you do when you live with a partner who is financially irresponsible? Singh says there are a number of options. “Say the man is a big spender and the woman is a saver, then the woman needs to manage the money so that whatever he’s spending is affordable,” she says.

“If both are earning equally, they could both put the same amount in a joint account and make the rest discretionary.”

Singh adds there can be a general feeling that money earned is money owned and if the partner is spending all the money on non-essentials, such as toys, drugs or alcohol then this is not a sustainable relationship or situation. “You will come to grief one way or the other so you may as well consider it upfront and early on,” she says. “The topic of money tends to always be an undercurrent until a crisis happens.”

Garrett says if someone feels his or her partner isn’t handling money responsibly then sometimes general counselling helps.

“Issues, such as those that arise when the breadwinner role changes, can correct themselves if addressed early.”

He adds even though people don’t like talking about it, a prenuptial agreement these days is worth considering.

Couples should also consider what banking arrangements are best suited to them. Some couples are fans of joint accounts, while others prefer to keep their existing accounts.

Lamble recommends having a joint account to which each contributes – if they are both in paid employment – which they can access without the other’s consent. “An attitude of ‘our’ money creates a team approach and tends to reduce the chance of financial infidelity and resentment,” she says. “I often suggest that the spender (the person who finds it harder to save) manages the finances, as this gives them a clearer idea of what comes in and what goes out.”

If the saver is in charge, Lamble says, then the spender can feel controlled and resentful because he or she is unaware of what is available for spending.

However, despite taking these measures, financial conflict can still arise. Lamble says if this happens, then each partner needs to understand his or her partner’s attitude towards money and where that attitude comes from.

“Having understanding and empathy for your partner really helps when it comes to sitting down and making joint decisions about the family’s finances,” she says. “The more judgmental you are, the more likely the financially irresponsible person will start to hide their spending, which always makes things worse.”

How happy couples approach their finances

They do:

  • understand each other’s attitudes towards money and where these attitudes come from
  • have a family budget they decide on together
  • communicate regularly and are open about their spending
  • make joint decisions about how money is saved and spent
  • take a flexible approach to their budget so that each person has some money they can spend how they please.

They don’t:

  • commit “financial infidelity” through gambling, being a shopaholic, alcoholic, or drug abuser
  • trash each other’s credit score by not paying bills on time and keeping this information hidden
  • feel resentful if one partner earns more/less than them or try to control the other person through money. Instead, they treat all money like it belongs to the couple, regardless of who earns it.

Further reading: five books for couples about finance

  1. All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi
  2. Couples Money: What Every Couple Should Know about Money and Relationships by Marlow and Chris Felton
  3. Smart Couples Finish Rich by David Bach
  4. The Couple's Guide to Financial Compatibility by Jeff Motske
  5. Marriage Money by Supriya Singh