Common Financial Conflicts and How to Navigate Them

As omnipresent as money is, as a tangible currency and a representation of value, it is inevitably the source of tension and disagreement. Different priorities and philosophies mean that people will assign different values to the same thing, and will prefer to put money towards one goal rather than another. And because money that goes in one direction can’t necessarily go in another at the same time, it can sometimes feel like a tug-of-war that can become quite unpleasant if you’re not careful. Here are some common scenarios that you might find yourself in, and how to calmly and confidently navigate them.

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Spending habits

You might spend a non-negligible sum on a particular hobby that you find important for your well-being, such as skiing, but someone else doesn’t understand why you’d willingly spend hundreds of dollars to trudge up and down a mountain to end the day cold, wet, and exhausted. In a similar vein, someone else might be regularly purchasing a good or service that you may not agree with, like fine dining experiences, but you can’t understand why he or she would pay that much for a meal that doesn’t even fill up the smallest stomach. Paying for these goods or services separately usually doesn’t pose any issues, but in the case of combining finances, there must be a discussion about what spending habits are important to you both, and why, before anything is tied together. Make it clear that these things are important to you, and that it’s important to you to understand why things are important to the other person as well.

Lack of financial transparency

If you discover that someone whose finances are tied with yours is making certain important money decisions without your knowledge, or is hiding aspects of his or her income or liabilities from you, that can greatly impact your own financial situation and future. It is important for both parties to be aware of the gravity of such a lack of transparency, particularly when it comes to money for the future. After all, money moves that you and anyone whose finances are tied to yours make today affect the money moves that you both can make tomorrow.

Income disparity

In the case when one party earns significantly more than the other, there are other complex factors that enter into the equation of what might be considered fair or appropriate when it comes to combining financial lives. What proportion is appropriate for each to pay for rent if applicable? Who pays for what during vacations, meals, activities, etc.? All of these should be determined ahead of time, either as a percentage of total cost or a fixed amount based on respective budgets. There are of course other ways to split costs, but the essential thing is to set up a system that works for both parties as soon as possible.

Affluent vs. Scarcity mindset

One person might be accustomed to pinching pennies and saving everything, not just money. This might look like keeping slightly used paper towels on the kitchen counter until they get “dirty enough” to throw away, adding water to empty soap bottles to finish up the final dregs, or wasting no crumbs when eating a meal. Another person might use and discard paper towels freely and regularly throw away soda cans or beverage bottles after a few sips, or have no compunction about having a waiter clear away a barely-touched plate of fries when at a restaurant. Each inevitably drives the other crazy. Understanding the origins of these habits and approaches to consumption is key to driving each other just a bit less crazy.

Future plans and priorities

When there’s surplus in the budget at the end of the month, it’s possible for there to be differing opinions as to where to allocate that extra money. Vacation or retirement? Emergency fund or child’s education fund? Instead of framing the issue as an either-or, decide on a way to, well, make these decisions. Perhaps rotate between the different possibilities each month, or allocate a certain percentage of the surplus to each category. That way, it doesn’t have to turn into a fight every time.

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Money conflicts are unavoidable, but not impossible to navigate with a bit of planning, patience, and good faith. At Hush, we want to encourage people to form and pursue their own financial priorities without unnecessarily infringing on other people’s priorities as well. As long as you constantly think about why certain elements in your financial life are important to you, whether they will remain equally important in five, ten, twenty years’ time, and how to make room for other people’s financial aspirations and be willing to reassess and adjust, you’re already on the right path!

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