When it comes to your relationships, it’s never all about the money – until it is. You’ve met a wonderful new partner, and it’s all going well, until you realise they never talk about money. Or you’re in a friendship group that has expensive tastes. Or you’ve got a friend that never stops freeloading.
All of these scenarios – and so many more – can cause massive rifts, which isn’t surprising since research shows financial stress is the number one cause of relationship breakdown.
In a society where we don’t like to talk about money, it’s helpful to have some guidance on how to deal with common and uncomfortable scenarios. Here are some tips that might help you avoid emotional conflict next time one of those sticky money issues crops up.
Be upfront with friends who love to spend
Sometimes we find ourselves part of a group where everyone earns more than you do. Everyone wants to go to expensive bars, eat at new restaurants, and go on expensive holidays. All of this is great – if you can afford it. If not, you could go in to credit card debt because that’s the only way you can socialise with people you enjoy
There are two ways to deal with this: stop being friends, or gear yourself up for an open conversation.
Talk to the person you’re closest to and ask them to put the brakes on the group spending and make your other friends more aware.
Or you may need to be more active when it comes to making plans. Organise nights out with an emphasis on the ‘cheap’ part of ‘cheap and cheerful.’
If talking about this makes you uncomfortable, start with humour. When holiday plans for a villa in Italy are being thrown around, joke about the second job you’ll need to pay for it.
True friends will understand and happily scale back the spending occasionally. If they refuse, then it might be time to find new friends.
Make sure you and your partner are on the same page
You’re in the throes of blossoming love – but your partner won’t talk about finances. Don’t overlook this. If you plan to share your life with someone who won’t talk about money, you need to question why.
It may be they’re in debt and don’t want you to know (and you need to know!). Even more sinister, some people use money as a form of power and control.
If it’s the former, understand that debt can be transferred to you. If you share the rental lease, the owner can come after you for money if your partner stops paying.
Shared bank accounts and credit cards can leave you in a vulnerable position if you’re not 100% across your outgoings. A shared mortgage can also cripple you financially if your partner has tax bills they haven’t paid for years.
If you don’t understand how your potential life partner affords to live, it’s time to have a difficult conversation – with yourself and with them. Ask yourself what you want from your financial future. Then, ask them the same thing. If your answers are vastly different, then you might be on different paths.
Get your partner engaged with your finances
“It’s boring”, “I don’t get it”, “But you do it so well”… classic lines from the partner who won’t have a bar of it.
If your partner spends with zero awareness of how much comes in and goes out, you need to make it relatable to them. For example if they’re a foodie who loves to eat out at new restaurants, you could say ‘when you spend this much eating out everyday, there’s no money left to pay the energy bills and the power will be cut off’.
Keep in mind many people despise finance because they think they’re ‘not good at maths’.
Keep trying, and insist on visibility. Of course in many relationships responsibilities are split with one partner in charge of finance. Yet it’s still important you both have a clear idea of how your joint finances are managed and where money goes.
The freeloader friend
We all have them… the friend who painstakingly divides a restaurant bill because their meal was $4 less, or the friend that goes MIA when it’s their round at the bar – or the friend you always chase for money.
First consider if the issue is actually to do with affordability. Unless you really know what’s going on, it’s best to approach the situation with curiosity and compassion. Perhaps there’s something big going on in their life that’s leading to their strange behaviour.
If you speak to them about it and there’s no deeper issue, then be upfront about your own financial situation and goals. Not letting them freeload isn’t about them, it’s about you trying to stay on track. And staying on track requires a bit of support – including theirs.
If you choose to confront money issues directly in your relationships and friendships, you’ll create stronger connections and you won’t compromise yourself in the meantime.