Financial Management In A Relationship

The number one reason for divorces and breakups is not because of cheating, but because of disagreements between how money should be handled. Nearly 50% of all divorces are caused by financial disagreements! Today, we will discuss this in depth and how you can prevent this from happening.

Money Is Deeply Psychological

First, what you need to realize is that money is not related to personality, values or attitudes. How you treat money is deeply psychological and traces back to your childhood. You either adopted your family's attitudes regarding money, or you rejected them and became the opposite.

How abundant money is in your childhood also creates psychological trauma. When money is scarce, this might cause PTSD feelings regarding money when you can't get food, housing or any other essential items. When money is too abundant, you may feel that you do not get enough love from your parents and hold resentments on how money get in between of the relationships you have with others.

Regardless of your background, we all have money scars. Your enemy with your partner is these money scars within your partner. You must acknowledge that your partner did not choose to inherit her money psychology. It was by pure luck that you have managed to inherit good fiscal management.

Hopefully, this allowed some sympathy to enter the air in the way you now see your partner. We must address these money scars with understanding, patience and care. Not with frustration, confrontation and judgment.

Because if you knew that money was psychological, you would have managed to successfully heal your partners' money scars by now. If you have been unsuccessful in this endeavour, you are yet to understand how deep money scars go. Before we get to that, a quick note on basic financial management between couples.

Spending

A healthy relationship is when both parties have the ability to spend and earn money themselves. If there is a discrepancy in earning power between the two of you, this may introduce, subconsciously power dynamics and abusive behaviours.

The guy should be earning is own money. The girl should be earning her own money. The both of you should maintain independence. Only after that, decide how much (%) of that money you want to put into a joint account.

The joint account is for spending on the both of you. Transportation, mortgage, vacation, dates etc. Maintain your individual accounts to your own discretionary spending. If you are poor and money is tight, then allocate more % into the join account. Review this on a monthly basis.

Monthy Review

It is so important that you actively discuss about money, and how the both of you as a team can work together to achieve your money goals. On one piece of paper, write down all the needs and wants the both of you have. On another piece, write down your monthly cash flow statement.

Do this discussion monthly. Go over your finances and track things. What is not tracked and measured is lost. Get clear on your cash flow, meaning, how money comes in and how money goes out. Where does it go? What categories? Food? transportation? Insurance?

If you or your partner have barriers or feel awkward about discussing money, then that is related to your money psychology. Every wealthy household in this planet, discusses about their money openly and honestly. Keeping finances a secret is like keeping the fact that you have cancer to yourself. How stupid is that!

Money Psychology

Now, I'm going to introduce the juicy information. The majority of this information is from the book "It's not about the money" by Brent Kessel. I highly recommend that you read this book to really understand money psychology in depth.

In brief, I will introduce you to the eight money archetypes. In the ideal healthy individual with no money scars, you should be able to adopt all money archetypes. (12.5%) each. But in practice right now, most of you will have a majority of your concentration in only one or two types.

Successful people who naturally have a really good money management tends to have 4 dominant archetypes. In this article, we will only focus on how you as a partner can help either yourself, or your partner loosen their grips over a particular archetype and heal their money scars.

The Guardian

The way to identify if your partner is a Guardian is when you see they get really anxious when it comes time to spend money. They might overanalyse and discuss their purchases, even if it makes total sense to make them.

Guardians cause friction in the relationship when they have "a stick up their ass" when it comes time to spend money. This "money hoarder" behaviour makes your relationship suffer because you can't use money to enjoy life OR only after lengthy discussion and coddling, emotionally tiring you out in the attempt of convincing your partner.

In regards on how you can help your partner. Help your partner heal the "disaster scenarios" in their childhood. Guaranteed, they will have a money scar in their childhood running out of money in some significant way. Help your partner dig them out and process them.

The Pleasure Seeker

The way to identify if your partner is a Pleasure Seeker is when they equate money with pleasure. They believe that money is earned to be spent, and they want to enjoy the fruits of their labour now in the forms of sensory enjoyment.

Pleasure Seekers cause friction in the relationship when money is handled recklessly. Buying useless and expensive things even though the both of you are low on savings. Not only your partner spends all of his/her money, she spends all of your money and the banks' on a line of credit as well!

In regards on how you can help your partner. Help your partner realize that he/she is using money to obtain love. Explain that love cannot be obtained in the material domain and help your partner slow down when he/she wants to impulse purchase. Link your partner's wants (love) with the things your partner wants to purchase.

The Idealist

You can tell when your partner is an Idealist is when your partner thinks that money is evil in some way or form. Idealists are anti-money and anti-capitalist. Idealists often have resentments over large businesses, the top 1% and the government (for not helping them).

Idealists cause friction in the relationship because they never have any money. They refuse to get a job because they refuse to help evil corporations. To you, they may look like a slob, prioritising their social causes and artistic ventures (which makes $0), much to your frustration.

Help your partner realize that she needs money so that she can help the greater good. Explain to your partner that money is neither good or bad, and that having a lot of money is required to change the world. Leverage your connections to introduce your partner to entrepreneurs mentors, or hire a business coach, who can bring her vision to life.

The Saver

You can identify if your partner is a saver when she tries to reduce spending in whatever way she can. Or, on if your partner is addicted to watching their savings grow. Somehow, that number must go out month over month for your partner to be happy and content about her money situation.

Where this cause friction is when The Saver tries to skimp out on everything. They try to buy the cheapest of everything and use broken things. The Saver might even have sophisticated ways to track and analyze their savings, and when these savings decrease to a dangerous amount (less than what she has last month) suddenly, this attitude might come out in extreme forms.

To help your partner who may be an extreme saver, take on the responsibility of paying for the small things. Encourage your partner to set aside a certain amount that the both of you can use to have fun right now. Embodying more of the Pleasure Seeker.

The Star

You can tell that your partner is a Star when she uses money to get recognition, attention, respect or prestige. A majority of the money she uses goes to upkeep her public persona and how she wants others to perceive her.

Where this cause friction is when The Star takes on unnecessary financial burdens to feed this outwardly apperances. They take on a car that's too expensive and dries up cash flow or buys a seemingly endless amount of luxury-branded clothing.

To help your partner who may embody toxic aspects of The Star, help her resolve the self-image between who she wants to appear as and who she actually is. Help her find her authenticity and delink the association between money and attention.

The Innocent

You can tell your partner is an Innocent when she lives from paycheck to paycheck. Money always seems to leave her, and she cannot attract much of it either. Innocents also have very unempowring, victimized mindsets when it comes to the getting of money.

Naturally this is going to cause a lot of friction due to financial hardship. To your perspective, the victimized mindsets of The Innocent is really irritating to deal with. Your suggestions are fallen on deaf ears and your partner just seems to have resigned in the domain of money.

To help your partner, you want to help her change her money beliefs. Often these beliefs will originate from a lot of hardship caused by money. Ask her to write it down and challenge them. Teaching her really basic financial education and slowly build them up to your level of understanding so that she may feel equipped to deal with money moving forward.

The Caretaker

You can tell your partner is a Caretaker when she uses her time, money and resources to help family and friends. She might even sacrifice her own financial success for other people. Donating to charities is also how Caretakers like to spend their money.

The friction comes when The Caretaker tries to prioritize the financial wellbeing of her family, friends and humanitarian causes over your shared financial success. You may notice that such mysterious characters who take advantage of your partner pop up again and again, draining your financial resources, much to your dismay.

To help your partner, help her realize that sometimes, taking care of others means that we let them encounter struggle, hardship and suffering so that we bless the people who rely on us with self-sufficiency and independence. Help her realize that we have to take care of our own needs first, before we can help others.

The Empire Builder

You can easily spot an Empire Builder. If your partner is entrepreneurial, starts her own projects and businesses and makes money without a job, this is a clear sign of an Empire Builder.

The friction comes when your partner loves her own business more than you. She prioritizes her business and never have time to spend with you. If your partner is very wealthy, friction might come where he is unable to stop being an entreprenuer, despite amassing wealth you will never be able to finish spending in your lifetime.

Help your partner realize that she can stop working so hard and enjoy life. Help her realize that through prudent investing, the both of you will never need to work a single day of your life again. However, if you are on the way up, either start your own business independent of his, or play a supportive role to help your partner.

Principles Of Managing Money As A Couple

Principle #1 is to be transparent on both sides. None of this can be achieved if you are not transparent about your dealings with money. Confide in your partner and trust that she can understand your fiscal decisions and provide support. If you partner shames, judges or engages in conflict when it comes time to be transparent, make her read this article.

Principle #2 is to plan your vision together, how future money will be allocated to achieve specific long term goals. What do you and your partner want to achieve in the following 5 years? How would the accounting come out to be? Write it all out together.

Principle #3 is to make big purchase decisions together. Set an amount on when you should discuss a purchase together. Let's say it's $1,000. If one of you wants to make a purchase over $1,000, then the both of you need to come together and come to an agreement.

Conclusion

The purpose of understanding all the financial architypes is so that you can balance out your partner's weaknessess around money, restore balance and implement basic practices and principles when it comes to money management. I'm sure you'll find much success like I did.

Best of luck. Please check out my other posts and practice everything holistically. Send me an email if you want a specific topic written. You can see "coaching" to see if I have room to onboard new students.

Cheers,
FriendlyWrenChilling.