Canadian couples say money causing real problems in their relationships

Investors Group poll shows almost a quarter of couples say fights about money are severe; still, couples feel they are doing better than their parents

Turning some pillow talk into money talk would help Canadian couples reduce fights about money and improve their relationships, according to a new poll released by Investors Group today. The release today is part of a research series sponsored by Investors Group and conducted by Decima Research that looks at families and money.

The poll demonstrates that money issues between spouses can be a difficult matter. A quarter of adults (25 per cent) describe their disagreements with their partners about finances as severe. And almost an equal portion (23 per cent) says their financial disagreements affect other aspects of their relationship. At 31 per cent, British Columbians were the most likely to say that money issues had affected their relationship.

In fact, the survey results indicate that even mild and infrequent disagreements about money have an affect on the relationship between spouses. More than half (53 per cent) of those who say a disagreement about money has impacted other aspects of their relationship also say the disagreements are mild and two-thirds (72 per cent) say they are infrequent.

“Dealing with money in a relationship is tough,” says Debbie Ammeter, Vice President of Advanced Financial Planning at Investors Group. “Having a clear financial plan that both partners understand and agree upon can help alleviate many misunderstandings about money that may develop in a relationship.”

The most common source of marital spats about money was spending - not borrowing and debt concerns. Spending money, both in general and on specific purchases, was cited as the source of their most recent disagreement about money by 31 per cent of Canadians. Borrowing and debt issues were the root cause of disagreements among nine per cent of respondents.

The research shows that couples today are different than their parents when it comes to financial decision making. For example, they are less likely to have all financial decisions made by one person. While 23 per cent of adult Canadians say that big financial decisions in their parents’ household were made by one person - with no discussion; only nine per cent say that is how big financial decisions are made in their household today. Of note, while Albertans were the most likely to say that one person made all the decisions in their parents’ home (31 per cent), they were also least likely to say that is how decisions are made today with their own family (two per cent).

How financial decisions are made in a family also appears to be a factor in marital disagreements over money. Couples who have some type of discussion about money are less likely to have disagreements with 48 percent saying they hardly ever disagree. Meanwhile, 65 per cent of households where one person makes the decisions say they have disagreements at least some of the time.

“Canadians are working better as a team and sharing the responsibility of financial planning due in part to the larger role women are playing as household bread-winners,” says Ammeter. “However, with a quarter of people still saying that money issues are affecting other parts of their relationship, it is also clear that more can be done to help couples deal with money. Involving an independent third party, such as a financial planner, in discussions about money could prove to be quite beneficial.”

Canadians feel they are doing better than their parents

Despite some marital hostilities over finances, couples today are feeling like they are doing well compared to their parents: 55 per cent say they are better off than their parents were at a similar stage of life, only 15 per cent say they are doing worse, and 30 per cent say they are doing about the same.

Canadians also consider themselves to be more active investors than their parents. Two thirds of Canadians (66 per cent) say they are more inclined to invest in stocks and/or mutual funds than their parents were.

As well, Canadians consider themselves to be calm & optimistic investors in the stock market and mutual funds. When asked to describe how they feel when they invest in stocks or mutual funds, the majority of Canadians say they are calm (61 per cent) as opposed to agitated (15 per cent); and optimistic (54 per cent) as opposed to pessimistic (20 per cent). The rest say they fall somewhere in between these polarities.

Canadians more willing to go into debt than previous generation

Despite the fact the large majority of Canadians (91 per cent) say they were well taught by their parents how to handle money, it isn’t clear how well they have adopted the lessons of financial prudence their parents tried to
instill in them. While only 24 per cent of people agreed with the statement that their parents believed it was OK to buy things you want now and to pay for them later, 45 per cent of adults today said they believe it is OK to buy things they want now and to pay for them later.

“This more open attitude to debt is reflected in the rising levels of household debt,” says Ammeter. “It is interesting, and somewhat alarming, that Canadians seem comfortable with rising debt levels. Managing personal and family debt is a critical component in most financial plans.”

Three tips for improving communication about money:

1. Talk openly with your partner about your money attitudes and issues.
2. Use a financial planner to help you develop a financial plan, which should include preparation for financial emergencies and how to juggle financing for competing priorities.
3. Find the common ground with your partner on money matters, including an agreement on how to handle money decisions.

The survey results are based on a Decima Express national telephone survey conducted with a representative sample of 1000 Canadians (18 years and older) between May 19th and 22nd, 2005. A sample of this size will provide results that can be considered accurate for the population overall to within plus or minus 3.1 per cent, 19 times out of 20.

Investors Group is a national leader in delivering personalized financial solutions to more than one million Canadians, through a network of approximately 3,500 Consultants located in over 100 Financial Planning Centres. In addition to an exclusive family of mutual funds, managed asset and other investment vehicles, Investors Group offers a wide range of mortgage, insurance, brokerage and banking services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies.