Dating and Money Issues: Financial Compatibility and Red Flags

We’ve all been there – wondering if dating someone with completely different money management/income to us is destined for failure. Are you just dipping your toes into the dating pool and wondering how to spot money-related red flags? Is your partner being secretive about their finances? Are you worried about financial compatibility? There are so many dating and money issues to be considered.

Let’s have a look at the often ‘hush hush’ topic of managing money. If you would like to hear a full podcast episode on this topic, where we also look at money in committed relationships and different forms of financial abuse, head to IE Hub’s Pocket Perspectives Podcast E1S2.

What is Financial Compatibility?

Before we look into financial compatibility, let’s talk about what compatibility is in general. Compatibility is when two things/people exist together with minimal problems or conflict. In a relationship, compatibility is important. It is the basis of how well you and your partner get along together.

Some people think that partners have to be really similar in order to have a successful relationship. Some think that opposites attract. However, the ‘best’ relationships often lie somewhere in between. Compatibility is about balancing your similarities and differences in a way that benefits the relationship.

When we look at financial compatibility, It’s not just about how much money you or your partner makes, but rather how you both approach, manage, and think about money. It doesn’t mean you have to agree on everything money-related (because let’s face it, who does?), but it does mean having a mutual understanding and respect for each other’s financial situations and perspectives.

Disclaimer: When we talk about respecting financial situations and habits, we are excluding dangerous and seriously unhealthy spending habits. If you or a loved one is in a bad situation with their finances, please reach out to a relevant organisation for support.

Dating and Money Issues

Picture this: you’ve met someone, but as you start getting to know each other, you realise that each of your financial situations couldn’t be more different. Perhaps you’re a big saver with long-term financial goals, while they enjoy living in the moment, spending freely without much thought for tomorrow. Or maybe you’re on opposite ends of the income spectrum, with one of you struggling to make ends meet while the other is fortunate enough to have financial stability.

Do You Think This is Game-Over?

Well, it doesn’t have to be. When dating or in relationships, it’s important to recognise that differences in money management between partners don’t necessarily spell doom. Just because you and your partner might have distinct approaches to handling finances, it’s not an automatic game-over for your relationship. The key lies in maintaining respect for each other’s perspectives, acknowledging and embracing your differences, and engaging in honest, open conversations about your financial habits and goals.

In these moments, it’s important to recognise that financial compatibility is more than just numbers on a bank statement.  Differences in spending habits, attitudes towards saving, and overall financial priorities can all lead to tension if you don’t talk about them early on in the relationship.

Did you know that, 27% of couples cite money reasons as the most common reason for arguing with a partner? Couples need to have open and honest conversations about their attitudes towards money and how they can match their priorities to avoid dating and money issues. 

Red Flags

During the early stages of a relationship, it’s important to keep an eye out for certain behaviours that might be cause for concern. These “red flags” can highlight deeper issues that may become problematic down the line. Identifying them early on can help you decide whether the situation is right for you, or if they are something you want to discuss with your partner.

However, ‘red flags’ are not always as they seem. If you become concerned with a partner and their spending, it is important not to jump to conclusions. Have a chat with them in a non-invasive way. 

Excessive Spending on Non-Essentials

One of the most obvious red flags is excessive spending on things they do not need. While it’s natural to want to enjoy life and treat yourself, if you notice someone consistently splurging beyond their means can be a cause for concern. 

It may indicate that they do not have any financial responsibility or that they can’t live within a budget, which could lead to financial stress down the road for both of you. 

However, it is important to note that not all spending habits are equal, and a lot of people have to live pay-check to pay-check to afford the bare essentials. This is not classed as excessive spending. This is why open and respectful communication is key to understanding each other’s financial backgrounds and situations.

Secret Spending

Similarly, secrecy about finances can be a warning sign. If your partner does not want to discuss money and seems to always avoid the topic, this could be a red flag. Especially if they start to become defensive when it comes to questions about money, it may be a lack of trust or honesty. 

However, you must also respect individual boundaries and preferences in sharing information about money. It is a sensitive topic and not everyone is happy to talk about it in the early days of a relationship. 

When the relationship progresses, and you are possibly at the stage of living together and/or combining any resources, such as getting a joint account, saving for a house deposit or having children, this is when it is important to avoid any secrecy.

Healthy relationships really are built on open communication, and financial matters should be a huge part of that. Whilst you must respect the privacy of someone you are dating, a healthy relationship has to find a balance.

When you spot these red flags, it’s crucial to go into the conversation with openness and honesty. Rather than jumping to conclusions or making assumptions, take the time to discuss your concerns with your partner in a calm and respectful way. 

By laying the foundations for trust and understanding early on, you can address any potential issues before they get worse and build a strong relationship moving forward.

Navigating Conversations

Bringing up the topic of money in a relationship can feel terrifying. It’s a sensitive subject that many people would rather avoid altogether. However, talking about finances is an important step for building a healthy and strong relationship.

If you find yourself struggling to even begin talking about it, there are ways to ease into the conversation in a more casual and light-hearted way. For example, sharing a personal story about a funny or memorable experience you’ve had with dating and money issues can help break the ice and set a comfortable tone for discussion. 

Whether it’s telling an amusing story about a disastrous date involving a budgeting disagreement, or a comical misunderstanding about splitting the bill – “the bill dance”, sharing these stories can make the conversation feel less intimidating and more relatable.

For inspiration, you can listen to the Pocket Perspectives Podcast S1E2, in which Jack and Tinisha offer some inspiration, share dating horror stories and show that discussing financial matters doesn’t have to be scary.

Above all, approaching these conversations with respect and empathy is essential. Avoid being judgemental or making assumptions about your partner’s financial habits. Instead, try to create a space where both of you can freely express your thoughts, concerns, and ideas regarding dating and money issues. 

Conclusion

And that’s a wrap. Basically, the gist is, that we all have our own deal-breakers when it comes to dating. Money-related or not. Our own ‘red flags’ are personal to us and can differ from one person to the next. So, when you are dating, it is important to consider your own priorities and values when looking for a partner. 

Remember, differences are not deal-breakers. It is how you manage and communicate about those differences which can make or break a potential relationship. Relationships are as much about compromise as they are about love. Keep what we have said in mind on your next date and good luck!  

Here’s to finding that special someone who understands our finances and feelings, and vice versa!

If you have any of your own red flags, please DM us on Instagram and we would love to discuss them on our next podcast!