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Your Taboo Money Perspectives

Money can’t buy happiness, but it turns out talking about money can!

According to the Wall Street Journal, 78% of couples who talk about money on a weekly basis say they are “happy”. Compare this to 60% of those who talk about it every few months, and just 50% who discuss it even less frequently.

We’ll be the first to say, talking about money can be awkward… Hey, we’ve made a whole podcast about it! The reality is, whether you’re swept up in the excitement of new love, or you’ve been together for years, having conversations about your finances can leave people feeling uncomfortable and defensive.

So let’s clear things up right off the bat… If money has ever been in a source of tension in your relationship, you’re not alone! 75% of the YIGC community agreed that money has been a source of tension at some point in their relationship.

You’re probably thinking, remind me why I should be talking about money with my partner?

Well, you should also know that disagreements about finances are a strong predictor of separation and divorce. That means, if you and your partner are wanting to build a life together, money is not a topic to avoid… Both for the sake of your relationship, but also for your mental and financial independence.

How do you split your finances with your partner?

Have you ever heard someone say that working out with someone increases your chances of achieving your fitness goals?

Well the good news is that the same applies to our finances! Research shows that couples who combine their money (either in part or entirely) are more likely to make better financial decisions. This is because you’re less likely to make unnecessary purchases… or you’ll at least think twice about them… when you’re sharing your hard earned dollars.

So how do you actually do it?

When we surveyed you, 60% of our community in a relationship reported splitting by dollar amounts, versus just 23% who split based on a % of earnings (with others reporting an alternative arrangement).

When it comes to splitting your finances, there’s no one “right” answer. It’s a nuanced topic and as we discussed on this week’s episode, communication is key.

Some couples decide to split everything 50/50 and call it a day. Others said that all their money goes into a shared account, viewing the balance as “our money”. Which leads us to one of our favourite money questions to ask… How much money could you spend without having to “consult” your partner first?

Another said…

I recently read an article about a man who had expressed his love for his wife in an unusual way… (I hope you’re all taking note with Valentine’s Day this week) Instead of an extravagant gift or a surprise trip to a bucket list location, he wrote her a book - a book about their financial life.

Whilst it’s unlikely to be at the top of the list of romantic acts (let’s be real, it’s not on your list at all), it may just be the most romantic gift of all. Disclosing the details of your financial life is actually very intimate, and requires complete trust in your partner.

In this particular instance, the husband had been concerned that his wife had shown little interest in their family’s financial matters. He considered the position she’d be left in should something happen to him, and so this was his love letter to her: a financial guide to everything you would need to know.

Of course, every relationship is different, and while you and your partner don't need to be equally involved in your finances, it’s important that you’re both equally aware and respectful of the other’s perspectives and needs.

Before we move on, a community member raised an interesting point around the impact of age difference when it comes to your financial situation and money goals…

Which brings us nicely to our next question…

Have you ever dated someone who made significantly more or less than you?

The reality is, it’s far more common for people to experience income disparity in relationships than it is to be on an equal wage. In fact, it’s the norm! Which is not surprising when you consider that for heterosexual couples, women are being paid 13.3% less on average than their male counterparts (yes, the gender pay gap in Australia is still at 13.3%). But let’s chat about what we think is most important about this topic…

More than double is a big gap!! It has us wondering, how does this dynamic play out? If you are in a committed relationship, is it fair that the person earning less is using 50% of their income to pay for joint expenses, while the higher earner is only contributing 10%?

Obviously, it’s a nuanced conversation and every relationship is different, but it sparks the question why more couples don’t split based on percentages?

It turns out that this is a hard conversation to start. 51% of you said that starting this conversation would be more difficult than just defaulting to contributing equal dollar amounts. A key contributing factor to this is that it’s often the person that is earning less who is asking to reduce their monetary contribution and even the playing field.

Two common themes came up in some of the lengthy DM conversations we were having with you…

1. We don’t feel like we have the right language or tools to explain the benefits of % based splitting, to actually bring the conversation up in the first place

2. It’s not uncommon for the person earning more to become defensive during this conversation

Unfortunately, we often find ourselves in these situations, where we haven’t been taught how to have constructive money conversations or be receptive to other’s suggestions.

Our tip? Start by discussing what your joint future looks like and the goals you both want to work towards. If you can imagine a specific future, it may help to justify certain sacrifices in the now. If you are on the receiving end, try to be open to the conversation and consider the emotions or the experiences of the other person. You don’t have to say yes to it, and certainly not right away. But it’s important to be receptive, ask questions, explore the idea and help your partner to feel heard.

Does being wealthy make someone more attractive?

If you’ve made it to the bottom, let this be your reward… 54% of you answered yes!!! :)

We thought the above was a nice way of looking at it. But speaking of getting your sh*t together… tomorrow’s episode is with the founder of ClubSup, Sophie McIntyre! We chat through all sorts of juicy topics including Splitwise etiquette with your housemates, and whether or not you can ask your friends to transfer you $$ after hosting them for dinner.

Until next week,
Mads and Soph x