Love may bring two people together, but sometimes money is what drives them apart. Matters of finance can strain relationships in many ways, such as when spouses keep secret debts from each other or when there are salary imbalances between partners.
One source of conflict is how differently people are raised to think about saving, spending, and investing. Yiting Li, a PhD student in family social science, is studying how the financial values parents instill in their children can clash with the financial habits of their romantic partners.
“When you are young, you observe your parents as financial role models and learn things from them that you internalize as part of your own identity,” Li says. “This is why money is sometimes really hard to talk about—because there’s no right or wrong answer. It’s about personal values.”
Up until the time children leave for college or otherwise move out of the house, they pick up cues from how their parents talk about money and budgeting, a process called financial socialization. Part of this process happens intentionally, when parents make a point of teaching their children, for example, to leave expensive products on the shelf or stick to a shopping list at the grocery store, guiding their children away from impulsive spending.
But parents’ habits can unintentionally influence their children, too. If they feel uncomfortable talking about their salary or debt, for example, children may be left to infer what they can from what they observe. Cultural norms can factor in, too. In Li’s previous research, she found Asian American parents don’t often talk about finances with their children, while parents of international students going to the US from Asia tend to instruct them about how to spend and invest their money.
Regardless of how it happens, children internalize many of their parents’ attitudes and behaviors, meaning two children from different families can have vastly different perspectives on finances. Li wanted to explore the question that has received little research attention in the past: what happens when they grow up and enter a long-term relationship?
“I might spend a thousand dollars on whatever I want because I can afford it,” she says. “But some people think, ‘If I have a thousand dollars, I need to pay my loans, pay my mortgage, and then move to the things that I want.’ There’s no right or wrong answer; it’s just different.”
A matter of values
In studying how family financial socialization goes on to affect romantic relationships, Li focused on couples who were married or otherwise living together. While people may see hints of their partner’s financial attitudes during the earlier stages of dating, they still handle most spending and budgeting individually. Once they start living together, though, it’s no longer possible to keep financial habits separate from the relationship. Couples will discover whether they agree or disagree, and in some cases may find it hard to resolve their differences and continue the relationship.
“This is a turning point for the young couples,” Li says. “If you’re cohabitating, you have to think about what kind of financial life you will have—who pays the rent, who pays the bills. Probably, you won’t continue the relationship if you disagree too much.”
In her research, Li used data from Arizona Pathways to Life Success for University Students (APLUS), a survey led by family social science associate professor Joyce Serido, which studies the factors influencing young adults’ pathways to stability and happiness. The survey has been running since 2008, tracking the roles that healthy relationships, responsible financial decisions, and personally meaningful work play as young adults move further into adulthood.
The survey questions explored to what extent couples believed their partner was spending within their budget, tracking their monthly expenses, paying down credit card balances, and saving money for the future. They also evaluated how they think their partner sees their habits, and to what extent they might agree or disagree with these habits. Li says many couples may accurately perceive one another’s financial values, but still disagree with the practices themselves.
“It is OK to hold different financial values toward financial matters, as long as the couples are willing to be open-minded to bring up the money topic and try to figure out why they have arguments,” Li says. Instead of criticizing a partner’s spending habits, Li suggests using “I” statements, like “I love the new [item] you just bought. Would you mind talking about the financial plan we made before?” Using a soft start-up at the beginning of this sensitive conversation might lead to better results about a couples’ financial relationship satisfaction.
“Let’s open up the conversation and share our thoughts,” Li says. “Maybe we can agree to disagree, or maybe we can compromise somewhere in between and have a plan for the future. It’s not a romantic subject, but we have to start somewhere.”
Story by Kevin Coss | Winter 2020
This story is adapted from one originally appearing in Inquiry, a publication of the Office of the Vice President for Research.