She wanted to know why I wanted to bankrupt us, and I wanted to know why she didn’t want us to be rich
Money is the prime source of conflict in relationships. When most people have “money fights” it is because they have “money problems”. Common sources of money related conflict include;
- Spending habits
- Resentment when one person earns more money than the other person
- Resentment when one person dominates the financial decisions
What if both people in the relationship are debt free, have high and relatively equal incomes, lots of savings and excellent spending habits, is it possible to still have money-related conflicts?
Money never stops being a source of tension, particularly if money is a trigger of anxiety (like it is for me). Once you move past having true money problems like overspending and debt, it’s natural to focus on things like how to invest your money to build wealth in the long term.
If each partner has opposite views of how to save and invest, money related tension is inevitable. I would classify this as a “good problems to have” but a problem, nonetheless.
That is the problem Trish and I faced when we combined our finances a few years back. We had a fair bit of disposable income and we could not have had more different views on what to do with that money.
I’ll start with me. I spend my spare time writing about personal finance, so you might have guessed that I had a more aggressive investing mindset. To me it was very simple, there are only three ways to create wealth.
1. Own a business
2. Own income-producing real estate
3. Invest in the stock market
We are both salaried employees, and not looking to start a business, but we had lots of disposable income. This made things even more clear in my mind, we needed to focus on investing as much as possible in the stock market and real estate as quickly as possible.
Let’s just say Trish did not share my worldview. When we met, she had all her money in a checking account. I’m talking tens of thousands of dollars sitting in a checking account earning 0% interest and getting devalued by inflation each year.
She has a generous defined benefit pension through work and no debt and in her mind that was plenty. Anytime someone at the bank tried to discuss different investment options with her, she would shut it down immediately. She had no trust in anyone working in the financial services industry. She was afraid that if she invested her money in anything that was not guaranteed, she would lose her money.
If it were up to me, we would have been investing every penny and even using leverage to magnify our returns. If it were up to her, we would stash every penny inside of our mattress. We were both convinced that our view was the correct view and that the other person was out of their mind.
Like everything else in marriage, the only workable solution involved a good deal of compromise.
The initial compromise was an offense/defense strategy. I would focus on our “playing offense” by investing in index funds inside our tax-sheltered accounts. She would focus on “playing defense” by making additional principal payments onto our mortgage.
Just because, I was playing offense and she was playing defense did not mean we were not still constantly talking about the merits of each approach. I wanted to normalize the idea of investing in the stock market, so I made sure we had frequent discussions about what our money was invested in and why. As she saw our investment balance grow over time, she (slowly) began warming up to the idea of investing in something risky.
The next compromise was on real estate. I remember one time I made a comment that I would love to own 10 investment properties in the next 10 years. This put a very specific image in Trish’s head and 2-hour debate followed. She wanted to know why I wanted to bankrupt us, and I wanted to know why she didn’t want us to be rich.
One of her biggest concerns about investing in real estate was dealing with tenants. So, we struck a compromise here as well. We bought an income property, but to alleviate the concern of dealing with random tenants we rented the house out to family members that we could trust. We were able to make a great deal and get the house significantly below market value, which I think is slowly warming her up to the possibility of further investment in real estate in the future.
Last week marked an incredible milestone in Trish’s financial journey. She opened her own investment account that she is managing herself. While I am happy to consult, she is executing the trades herself. Something I could not have imagined 3 years ago.
Like with most areas of our lives, we seem to be complementing each other quite nicely when it comes to investing. Trish is restraining my tendency to get too aggressive and I am helping to normalize the concept of risk and returns.
It has been working for us for one simple reason; we listen, and we talk. We listen and acknowledge the other person’s fears and desires and work out a game plan so that we both get what we want. As both of our views evolve, we continue talking and when appropriate we update our game plan.
It sounds simple but is hard work. But I am happy to report, hard work pays off. I don’t know what the next step in our financial journey will be, but I know we will face it together as equal partners.
2 bonus stories on money & relationships
When Is It Ok to Lend Money to Your Significant Other?
When you choose to spend your life with someone, you are also choosing to merge your finances, including your debt…
How My Wife & I Got On The Same Page About Money
Our 10 Year Plan for Financial Independence
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions