Cheers to love, money and the balance between the two

Valentine’s Day is known to be the day of love, whether it is romantic love, friendship, or self-love. But why should we limit ourselves only to romantic gestures? Why not use the day to focus on something that is of great importance in any relationship? Whether you are single, taken, romantically inclined, or pragmatic, we suggest celebrating February 14th as “Valentine’s Money Date“, a day to talk about your and your partners’ finances, to set goals, and to make sure both of you are happy and satisfied. Thus, Valentine’s Day becomes the day of the most romantic of all proofs of love – financial equality.

In fact, desire and reality could not be further apart on these topics. The ElitePartner study “Money and Love” from 2019 revealed that single women in particular (76 percent), but also women in relationships (64 percent), consider financial independence in a relationship to be particularly important. Mastercard’s current “Womenomics Study” also showed that for the majority of German women (63 percent), financial independence is one of the most important goals in their lives. 

But in fact, more than one in three men still largely provide for their partner (35 percent) –  while just 13 percent of women take on the provider role in their partnership. In 2016, the “Mitten im Leben” study commissioned by the German Federal Ministry for Family Affairs, Senior Citizens, Women and Youth found that 19 percent of married women aged 30 to 50 earn no salary of their own. 63 percent of married women earn less than 1,000 euros net per month. In addition, the longer a relationship lasts, the higher the proportion of men who are the main breadwinners – especially when starting a family, more couples choose this model.

No surprise, then, that 30 percent of German women feel financially dependent and 82 percent of them are convinced they will never become financially independent. While women want to be financially independent, they are far from getting there as these statistics show.

When it comes to money, there seem to be two types of relationships – the hopeless romantics and the sensible realists. While half (51 percent) believe that money should not play a role in love, the other half (49 percent) find it naive when couples do not clearly regulate their finances. 

Romance or not – anyone who can’t talk openly about money in their relationship and ensure equality here is putting their own independence at risk sooner or later. Studies even show that women stay in unhappy relationships because of their financial dependence. Not to mention that divorce rates are close to 40 percent. So a model of financial dependence for love only works as long as the partnership is happy and stable, the partner is not incapacitated… and until the day of retirement comes. That seems like too much risk for a woman to take, doesn’t it?

But there are even more reasons for an open discussion about finances in the partnership. Being financially dependent on your partner carries the risk of feeling inferior. These feelings of insecurity or the need to always have to ask the other person for permission when spending money can put a lasting strain on the relationship. It is not surprising, then, that money is one of the most common topics of conflict in relationships. (For those who would like to study the topic in more detail, we recommend the American Institute of Certified Public Accountants’ study on the subject).

Couples have disagreements not only about what money is spent on, however, but also about the age at which they want to retire, the amount they want to save for retirement, the risk they should take on their investments, and their savings goals. 

A financially independent relationship therefore not only allows people to pursue their own goals and dreams and go through life in a self-determined way but also to know that their own future and pension are secure.

Let’s get back to the facts: The ElitePartner study also found that while 56 percent of Germans talk to their partner about sexual desires, only 42 percent are equally open about money. For example, do you know how much your partner has in their bank account? The “Couples and Money” study by Fidelity Investments, which was conducted among 1,713 couples, found that almost 40 percent of the survey participants could not say how much money their partner actually earns. So let’s finally break this outdated taboo and talk about money together!

And even if you’re not currently in a relationship, it’s important to think about how you want to shape your future with or without your partner. This way, you are clear and can set a good foundation when starting a new relationship.

A Money Date, as we envision it, doesn’t have to be unromantic or uncomfortable. You should feel good, have fun and create a relaxed atmosphere for conversation. That’s why we’ve teamed up with Kolonne Null to give away three Valentine’s Money Date Bundles.

While the drinks from Kolonne Null provide the necessary date romance, you’re sure to never run out of financial topics of conversation again with the Money Therapy card set. As a small motivation booster for the common financial goals, you will be able to also win 50€ starting credit on your Vitamin investment account to get started on your journey.

The best advice for couples talking about money is that it’s not a competition and that the dialogue should be ongoing. Here are a few more tips to help you have a fair conversation about money:

• Listen carefully to each other and try to understand your perspectives.
• Avoid blame and try to find solutions together.
• Set common goals and work together toward them.
• Hope for the best and prepare for the worst! Always think about what your decisions mean for your future in the long run. Play out together the scenario of what the failure of the marriage or partnership would mean for the individual.
• Set a fixed time when you will regularly talk about finances in the future.
• Use the suggested topics below to look at your finances from all relevant angles.

Whether it’s last weekend’s shopping, the down payment on a house, or simply how to manage your monthly budget, finances can easily cause tension and misunderstandings. To overcome these challenges in your everyday life, it’s important to think about the following:

• What money beliefs influence your decisions? To what extent are your relationships towards money similar or different?
• How do you divide fixed costs (e.g. rent) among yourselves? Does everyone pay half or does everyone pay proportionally according to their salary?
• Which account model do you use?
• Who has what money and how do you feel about it?
• Do you already have a joint budget? Do you stick to budgets? 
• What major expenses are planned and how will they be paid?
• How will debts be paid off? 
• Do you save specifically at the beginning of each month toward common financial goals (vacation, house…)?
• What kind of risks are you willing to take to achieve your goals? What kind of investments are best for you?

Especially during parental leave, raising children is equivalent to working full time, but without pay. And did you know that part-time work also means a part-time pension? Many mothers do not work at all or only part-time after the birth of their children. However, this means that not only does less money flow into the bank account during this time but also that you are reducing your retirement benefits. In principle, child-rearing periods are taken into account for parents working part-time and the missing pension points can be at least partially compensated, but those who also work part-time and earn less must expect a significantly lower pension. (Which, given the expected pension level in the future, would be more or less only half of what is already far too little).

This is because the amount of the old-age pension is calculated primarily on the basis of how many contributions were paid to the pension insurance fund during the course of one’s working life and how high these contributions were. The higher the gross salary, the higher the pension. So, for example, if you cut back from a 40- to a 20-hour week, your pension contribution will also be cut in half. Unfortunately, many people underestimate these pension gaps in old age and don’t start making provisions for retirement early enough.

Therefore, it is worth talking to your partner about the following topics:

• During parental leave or part-time: Arrangement of a cash balance by the partner who continues to work full-time. This amount should in any case be used for direct investment in one’s own retirement provision, e.g. as a monthly savings plan in ETFs. Couples must decide for themselves how high this amount should be. A point of reference can be the earning points that you receive as a man or woman if you mainly take care of raising children.
• How can each of you work as much full-time as possible, or how can both of you work part-time at a higher percentage of hours so that both of you receive as many pension points as possible?
• Who takes parental leave?
• Is there already a private supplementary pension?
• When do you want to retire? 
• How much money do you need to reach your retirement goals?

As a family, it’s not just about managing your finances responsibly and fairly, but also about setting a good example for children in how to handle money.

• How should childcare, education, and other expenses be shared?
• What will you teach your children about money, how will you teach them to save money?
• How can you teach your children a positive money mindset?
• Do you want to invest money for your children’s future?
• Are there financial obligations to family members that need to be considered?
• Do you perhaps need a partnership agreement or prenuptial agreement that regulates who will take care of the children and for how long, and what compensation payments will be made?

In a relationship, both parties benefit from an open discussion about finances. Financial equality creates harmony in the partnership and allows both parties to achieve financial security and enjoy more freedom.

With this list, you shouldn’t run out of things to talk about on your Money Dates anytime soon. We hope that these tips will help you to bring the topic of money openly into your relationship and thus achieve financial equality. And now, good luck in our Money Date Contest!