It’s often said that “breaking up is hard to” and “it’s expensive being poor.” As oft-used as those phrases, they still hold relevance.
Consider the findings in a new survey conducted by Self Financial. It’s comprehensive and has plenty of positive data and tidbits, but one of the eye-catching, negative takeaways is that a lot folks are mired in bad relationships because their finances became intertwined with those of their partners. Now, they can’t afford to be single.
“46.2% of respondents said they would or would be more likely to break up with their partner if it would have no financial impact on them,” according to Self Financial.
That’s a discouraging data point because it says that nearly one in every two people in a relationship would look for greener romantic pastures if it didn’t mean harm to the other green: money. Interestingly, that 46.2% isn’t far off the 41.4% that told Self that money issues factored into decisions to terminate previous relationships.
Why It Matters to Advisors
As is often noted in this space, advisors aren’t officially couples counselors or therapists, but they can be a force for good at the intersection of finance and romance. One easy avenue for helping on that front is encouraging more communication.
That goes for both female and male clients because the Self study says 35.5% of respondents believe their partner is financially dependent on them, but that percentage jumps to 46.5% for men. Looked at differently, advisors working with women should focus on issues such as education, empowerment and reduced financial dependence – all positive things to establish regardless of relationship quality.
As for communication, there are signs that’s improving, but there’s still work to be done. Financial conversations between romantic partners are still viewed as taboo. So much so that a variety of studies indicate participants in these relationships would rather discuss their partners’ previous sexual encounters than money. Fortunately, folks are having the money talk, though at a gradual pace.
“Those in relationships for 6 months or less had a 55.3% chance of sharing salary information, compared to 92.6% of those in relationships longer than a decade,” adds Self.
It May Be Costly to Stay Single
Take from a single person, those of us in that boat have myriad reasons why we’re there. Talk about a conversation for another time and place. The bad news for those of us on the “unpartnered” boat is that we’re likely missing out on added money.
“Four in five (83.6%) of people who reported that their relationships had a net positive impact on their finances estimated that their relationship/s had increased their net worth by upwards of $10,000,” says Self. “Just under a quarter (23.8%) of people said that they had gained between $100,000 - $249,999 as a result of their combined romantic relationships.”
The debate about money buying love or not will rage on in eternal fashion and entering into a romantic union solely financial reasons arguably equates to codependence and can lead one of the partners to the camp of being unable to afford to leave when things head south. All that said, it’s clear there are potential perks for both parties when they team up.