What is financial intimacy and why is it important? Of course, all types of intimacy in a relationship are important. But it's fair to say intimacy means different things to different people. Some of us link intimacy to being more affectionate. Perhaps we might hold hands or give each other a peck on the cheek.
Others think relationship intimacy means opening up about our deepest feelings and beliefs. And, of course, there’s also physical intimacy in the bedroom! But financial intimacy is just as important as all the above.
And while it may not be top of mind, or feel particularly romantic, financial intimacy is an essential component of a relationship. Let’s hear why.
What does financial intimacy look like?
When financial intimacy exists, there’s perfect harmony between both partners about the subject of money.
At its best, money provides us with a comfortable lifestyle and the essentials we need. These include a roof over our heads and the food on our plates.
But at its worst, money can be a source of stress, with debt or lack of money eating away at our happiness.
Financial intimacy occurs when two people in a relationship are 100% honest about their beliefs toward money. Essentially, both partners are in alignment to create a healthy financial relationship with trust at the core.
What happens when financial compatibility doesn’t exist?
Unfortunately, even happy couples who have been together for a lifetime aren’t always financially intimate. And some common problems crop up when there’s a lack of financial compatibility. Check out the following tell-tale signs.
Secrets about debt or gambling
44% of Americans keep money secrets from their partner, including those related to gambling addiction. Secrets might be hiding a checking, savings, or credit card account from their other half.
Others have debt they haven't disclosed to their partner. But who is this affecting? Research suggests this is a problem that’s more common in millennials than in Gen Xers or baby boomers.
Financial imbalance
How much you earn is also a huge issue. When each partner brings a different income to the financial table, this can create problems with security in a relationship. Some higher earners feel they’re subsidizing the lifestyle of their lower-paid partner.
While those on a lower income may be concerned they're not good enough for their other half. Financial intimacy may also be lacking if one partner tends to splash their cash more than the other.
This is heightened if they’re using a joint account to fund their spending. Both partners pay into the same account, but one is taking more out than the other.
Communication breakdowns
It's no secret that money can cause arguments in relationships. In fact, financial decisions are a frequent source of conflict between couples who are married or living together.
Research reveals that 7 in 10 Americans have disagreed with their other half about finances in the past year. And this type of communication breakdown can have negative consequences, including the end of the relationship.
Lack of trust
Ever heard of financial infidelity? This occurs when one partner tells outright lies about money, often out of fear of their partner finding out the truth. It's often likened to someone having an affair due to the information concealed from a partner and the hurt caused.
But how does this affect couples? 41% of Americans claim they'd be likely to end their relationship if their partner was dishonest about their finances. Of these, 20% say the damaged trust would make it extremely likely they'd call it quits.
How to have financial intimacy discussions at different relationship stages
Want to avoid problems caused by financial infidelity and incompatibility? The best approach for couples is to be 100% honest at each stage of the relationship.
While every pairing is different, some common themes and discussion points crop up along the way. Follow these tips to get started.
When you are dating
Just getting to know each other? This is a great time to learn a little more about the other person. Ask subtle questions to judge their views about finances.
How does your date value money? Do you share similar beliefs and financial aspirations?
You may not want to ask as many questions as your accountant would. After all, you're dating so you don't want to put them off! But you can find out if they’re keen to buy a home and save for the future.
Even if you're not comfortable asking the questions outright, there may be tell-tale signs. Look out for signals that your romantic interest likes to party hard and blow their cash away.
Use these first few dates to suss out if your financial beliefs are aligned. If they’re not, this isn’t necessarily a deal-breaker. But if you can’t imagine becoming financially intimate with this person in the future, the relationship may not be worth pursuing. It’s your call!
Moving in together
When things are a little more serious, the next step is often to move in together. And this is a big money decision. Even if you’re renting first rather than buying, there are plenty of financial chats to have together.
The first step toward financial intimacy is to sit down and discuss your money management plans. Ideally, this conversion should happen before you've officially moved in together.
How will you split the bills? Will you have a joint account? Will you split the rent 50/50 or each pay a proportion based on your salaries?
There are no right or wrong answers here. The point is to have an honest discussion to ensure you’re on the road to financial compatibility and that you're comfortable with the plan.
Buying a home together
Buying a home together is often the next stage if living together has gone well. This is another big step.
Financial intimacy here means discussing how you'll afford a downpayment on your first home. Will you each save 50%? Perhaps this isn't possible. In which case, will you choose a different split based on your earnings?
Also consider whose name the property will be in (typically, this would be joint). Don't forget to discuss how you’ll split the mortgage costs. And factor in the cost of regular monthly bills, and your approach to maintaining the property.
Are you both committed to saving money toward home repairs and cosmetic updates? Or would one of you rather spend money on expensive vacations and status purchases such as a new car?
This is why it’s helpful to understand a person’s financial motivations when you’re dating.
Getting married
If you're newly engaged, then congratulations! This is a truly exciting time and a new chapter in life. It's also a chance to have a chat about your finances! Planning a wedding and honeymoon can be expensive (although it doesn’t always have to be).
Before you get carried away with looking at dresses and venues, have a frank discussion about how much you plan to spend on your special day. Some couples may be on the same page about this, others will find there's a slight mismatch.
The cost of your wedding is only one aspect of marriage worth being financially intimate about. Before tying the knot, you may also want to discuss the possibility of signing a pre-nuptial agreement if you are both on the same page about one.
A prenuptial agreement or a premarital agreement is a binding contract. Essentially, it outlines what would happen to the property and financial rights of each spouse if the marriage ends in divorce.
Prenups can seem unromantic, as they're already focused on the end when the marriage has yet to begin.
But where one or both partners has significant financial assets, a prenup agreement offers extra protection and can be an essential part of a financial intimacy chat.
Financial intimacy takes teamwork
Are you and your partner hoping to improve your financial compatibility? Know you’re not alone! And more importantly, you don’t need to attempt this goal by yourselves.
Numerous financial professionals are available to support your financial intimacy goals. However, you can also educate yourself by taking a Clever Girl Finance course or by diving into our informative blog articles.
Professionals are available to speak to depending on your relationship stage and your specific concerns. For example, you might speak to a financial advisor, accountant, mortgage advisor, or tax advisor. And you can seek guidance separately or as a couple.
Either way, this will ensure each partner has all the information they need, explained by a professional. From here, you can return to your relationship as equals with a plan in place to tackle your finances together.
It’s never too late to achieve financial intimacy
Whatever relationship stage you’re at, financial intimacy is worth achieving. And this is a goal within reach. Begin by opening up to your partner about any concerns you have. Next, take their pulse about becoming more financially compatible.
Even if financial intimacy has been lacking, it’s never too late to get back on track. Begin with an open and honest discussion about how you both view money.
From here, you'll create joint financial goals together. And don't forget to seek professional advice to help you stay on track.