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Financial Red Flags in a Relationship - The Definitive New Zealand Guide

Our guide explains common red flag financial scenarios in relationships, how to address them, must-know facts and frequently asked questions.
Updated 19 August 2024
Summary:
  • We believe that finances are one of the most important elements of a relationship. A significant portion of spats and disagreements in relationships are caused by money. 
  • This guide has heavily emphasised the financial aspects of relationships, but they are by no means the only criteria or variables on which you should make your decisions. Please weigh other factors and only use this as a guide to broadly understand the realities of finances in relationships.
  • People come from all different financial backgrounds. Try to approach your relationships with a viewpoint to accept and understand rather than set blanket rules or limits.

Who is this guide for? 
This guide is heavily tailored towards relationships with partners but can equally apply to other relationships with friends/family/children/parents. This guide is extremely broad to capture all types of situations New Zealanders might find themselves in – for example: 
  • You’re recently single and want to identify some of the lessons from past relationships before entering the dating scene.
  • You’re dating someone new, but they've been giving off weird financial vibes or making off-hand spending comments, and you aren't sure what to do about it.
  • You’ve been dating someone for a while but think their approach to money and saving completely differs from yours. Do you know whether this is a deal breaker?
  • You’re about to marry the love of your life but are anxious about prenups and divorce (and there may be a huge financial imbalance between the two of you, for example, one of you already own a house, received a huge inheritance or have significant investments.
  • You’re happily married and thinking about kids, but one partner isn't working, and you're concerned about the financial costs and stress implications of having kids at this stage of your life.
  • You’ve been married for decades with kids, and you're contemplating divorce (mainly because of finances and spending).

Our guide covers:

As a rule of thumb, this guide is ideal for New Zealanders who are at "milestones" in their relationships, such as:
  • I am dating someone new (3-4 dates in) and am considering "going exclusive". 
  • Existing relationships (e.g. around 3 years in), which is approximately the time New Zealand law defines your relationship as "de-facto partners" (with legal ramifications if you separate).
  • Long-term relationships (5 years or more) where you're about to make significant financial commitments (kids, property, mortgage, etc.). ​

MoneyHub Founder Christopher Walsh shares his experience on financial red flags in relationships:

"Financial irresponsibility in a partner isn't just their problem - it becomes your problem, too. When one person is reckless with money, it can set back not just your immediate family but also your parents and children. The cascading effect of poor financial decisions can limit your future opportunities and create lasting stress. This isn't something to take lightly; addressing it early can save you from years of financial and emotional turmoil.

I've seen people grow up in families with second homes, season ski passes, annual trips to Europe, and tennis lessons only to get together with a financial mess who drags them back to the dark ages and establishes a permanent situation of begging parents for money to cover bills. It never makes sense why the issues aren't addressed - perhaps I'm not romantic enough to see the love, but the stress and resentment are evident. Some of these relationships last, others don't - but the years go by fast and the 'adventure' is one to best avoid. 

Financial compatibility is often pushed aside in the haze of romance. But the reality is that money - or, more precisely, the lack of it due to frivolous spending, causes immense stress and leads to breakups. I've seen it happen repeatedly: couples with good incomes end up in debt because they aren't aligned on financial goals. It's essential to be transparent about your financial habits and expectations to avoid this common pitfall.

I've also witnessed many relationships suffer under the weight of financial secrets. Whether it's hidden debt, undisclosed spending, or failed secretive investments, these issues erode trust and stability. Money problems aren't just about dollars and cents; they reflect deeper trust and communication issues. If you can't talk openly about finances, you're arguably not where you should be in your relationship even if earnings are 'strong' and you have regular incomes and a luxurious lifestyle.

Many people try to mask their financial problems with vices like drinking, gambling, or reckless spending. These behaviours are red flags that need to be addressed openly and honestly. A relationship built on financial secrecy and mismanagement is a ticking time bomb. In the long run, the only way to make a relationship work is through complete transparency and mutual understanding of financial goals and habits.

Financial disputes are a leading cause of relationship breakdowns, often because partners aren't on the same page about spending and saving. Financial misalignment can lead to significant stress and resentment even when both partners earn well. The anxiety of not knowing where your money is going or whether you'll have enough for plans can keep you up at night. Having those tough conversations early on is far better than worrying in silence and watching your relationship deteriorate".
Christopher Walsh
MoneyHub Founder
​​

When Do Finances Become Important in a Relationship?

While it can vary from person to person, finances touch on almost every aspect of your life (and the life you'll live with your partner). From budgeting and saving to expenses and investing, finances are important from day one. Most couples probably won't touch on finances until they're far into the relationship (usually past the dating stage). While it may be unromantic to bring up, understanding your (and your partner's) approach to finances (and your financial compatibility) is better dealt with earlier rather than later. 

What are financial red flags in a partner? 
In relationships, red flags indicate unhealthy or mismatched behaviours that your partner might be exhibiting (that can initially go unnoticed). Unfortunately, these issues can often balloon into deeper issues and potentially worsen over time. Typical behaviours that might be deemed red flags are:
  • Not wanting to discuss finances
  • Out-of-control spending (that wasn't agreed upfront and is paid for by debt)
  • Hiding inheritances
  • Not knowing where all their money is going
  • Not wanting to save (e.g. a consumerist mindset)
  • Hiding bad debts
  • Hiding bad credit and default history
  • Hiding tax issues
  • Hiding side income or second jobs
  • Hiding gambling

Why is financial compatibility so important? 
Financial compatibility is one of the "big three" reasons cited when it comes to marriages and relationships breaking down (with the other two being infidelity/cheating and personality incompatibility.

The leading causes of divorce, according to a survey of Certified Divorce Financial Analysts (CDFA) professionals, are primarily basic incompatibility, infidelity, and money issues. Specifically, 43% cited basic incompatibility as the top reason, 28% mentioned infidelity, and 22% attributed it to financial problems. These findings highlight that while emotional or physical abuse, parenting issues, and addiction also play roles, they are much less frequently the primary causes compared to the top three factors​ per the Institute for Divorce Financial Analysts​.

Know This: Nobody getting married expects to get divorced, but the data says otherwise. The well-known saying that half of marriages end in divorce is somewhat true. ​​According to Cision, New Zealand has around a 42% national divorce rate. For example, out of ten couples that get married, at least four will get divorced at some point in their lifetime.

Being financially compatible is extremely important (and often overlooked)
  • Many people look for complementary or compatible personalities, but many overlook the financial side of personalities, too. Money and spending sit at the core of almost every Kiwi's lifestyle - whether it's the decision to buy or rent, have children, or travel abroad in luxury or on a budget. 
  • The term "financial compatibility" pertains to the degree to which your financial behaviours, attitudes, and objectives are in sync and complement each other in a romantic relationship. The specifics of financial compatibility can vary among couples, encompassing aspects like spending habits, savings patterns, attitudes toward debt, financial aspirations, and strategies for budgeting and investing. Financially compatible couples typically discuss money matters openly, effectively make collective financial decisions, and pursue common goals.

Looking at the data: financial instability in New Zealand is on the rise
What’s the link between money stress and relationship problems? 
Some insights, published in 2020 from the 3,000-person survey conducted by the Office of the Retirement Commission (formerly the Commission For Financial Capability/CFFC) across New Zealand found the following:
  • Financial issues are causing relationship strife for one out of every five New Zealanders.
  • Due to financial difficulties, 20% of respondents experienced conflicts with partners, family, or close friends.
  • The group most affected are those aged 18-34 (Gen Z and Millennials), with 24% reporting financial tensions affecting their relationships. This issue seems to diminish with age: 21% of 35-54-year-olds, 14% between 55 and 65, and only 7% of those over 65 experienced similar problems.
  • The pandemic likely exacerbated financial strains within relationships (especially during lockdowns). The lockdown and decreased household incomes have increased budget stress, causing conflicts over spending habits that may not have been transparent.
  • Increased online shopping during the pandemic has also made spending more visible, potentially leading to conflicts.
  • New Zelanders with an annual income of less than $10,000 were most likely to report relationship problems due to financial issues (28%). 
  • However, higher earners were also impacted. 21% of those earning between $150,000 and $200,000 also experienced money-related stress (7% less than the lower income groups, but still more than 20%).
​​

Common Red Flag Financial Scenarios Kiwis Might Face in Relationships

​While the below won’t capture all scenarios, the majority of “red flag financial scenarios” are concentrated in just a few traits:

A partner that keeps (financial) secrets

  • While discussing money might not seem particularly romantic, it's a crucial conversation for couples.
  • Whether it's the hidden credit card debt, the prior financial hardship applications or the "under the table" side hustle income they generate, many Kiwis find out much later that their partner may have previous debts, incomes or expenses that they haven't disclosed to their partner. New Zealand has a high cost of living and arguably low wages - it's not easy to keep afloat and debt is advertised widely.
  • Other scenarios might include hiding how wealthy one partner is (whether through a salary, inheritance or a windfall), which can cause imbalances in the relationship, avoiding or actively disengaging from financial discussions, misrepresenting their spending, or refusing to share financial information.
  • Whilst there shouldn't be any expectation that your partner tells you about absolutely every single little detail about their financial life on the first date within 10 minutes of meeting them, there is usually an expectation as you get deeper into a relationship that openly sharing things (especially financial things) becomes more normal and acceptable. This can be tough for people who aren't used to opening up, but the more transparent you are with your partner about tough conversations like finances, the more likely a relationship will thrive. 

From a recent 2024 Westpac (Australia) study on relationships and money: 
  • Two-thirds of participants believe couples who regularly discuss money are more likely to have a healthy relationship, though 22% admitted they seldom talk about finances with their partner.
  • In healthy relationships, both individuals should be aware of their financial status (both separately and jointly) and actively participate in financial decisions. What impacts one party is also likely to impact the other (whether legally or practically). This helps alleviate concerns, manage expectations, and set a successful foundation for achieving both personal and joint goals.
  • There's a significant difference between feeling awkward about discussing finances and deliberately keeping them hidden. It's important to discuss finances openly (hiding things is rarely good for relationships in the long term). Refusing to discuss money outright should be a red flag.
  • This avoidance can become a significant barrier, for instance, when purchasing a house together. Hidden debts or secret expenditures can hinder your progress and even prevent you from obtaining a mortgage.
  • One way to gently bring up the topic of finances is to try to make the discussion enjoyable by planning a 'money date', which is a night with your partner where you discuss finances over a glass of wine or hot chocolate in a pleasant setting. Discussing money non-judgmentally, focusing on values rather than numbers, is a great way to get your partner to open up if they're anxious about discussing money. Start with non-invasive questions like whether your partner prefers saving or spending or their financial goals.
  • While aligning spending habits and financial goals can be challenging, it is essential to address any signs of financial infidelity that could affect your future together.

A partner that wants complete control over the finances (bank authority and spending)

  • It's fine for one partner to take a more natural interest in finances and spending than the other - often, one might be more numbers-oriented. However, there's a fine line between being good, enjoying crunching numbers, and taking obsessive control over each line item of spending. 
  • Colloquially known as "The Control Freak," one partner may have significant leverage or a power dynamic over spending decisions, which can quickly escalate into financial abuse. In some relationships, one partner may use financial leverage to manipulate or control the other, especially when there is a significant income disparity. This abuse can manifest as restricting the partner's spending, withholding financial resources, or pressuring them into accruing debt.
  • While letting one person manage most of the finances is fine, it should never feel like a one-sided conversation. Often, couples will have their bank and joint accounts (for things like household bills or mortgages). Whatever works best for the relationship is usually fine, so long as each partner feels comfortable with the arrangement and doesn't feel overly restrictive.

The “Keeping Up With The Kardashians/Joneses” wealth flaunter

  • Effectively the opposite of Stealth Wealth, another big "financial red flag" is displaying wealth ostentatiously while dating or during the relationship. Given New Zealanders are, generally, fairly modest, many will agree that pretentious displays (e.g. flaunting) of wealth are a major financial red flag in a new relationship.
  • ​It often stems from insecurity and can suggest a misalignment in other areas (such as what their partner ultimately values). While some New Zealanders are attracted to overt displays of wealth (as wealth can potentially be seen as a proxy for a higher quality of life), often those who are trying to look wealthy are counterintuitively less wealthy than those who don't show off their wealth (as it costs a lot to appear wealthy).
  • As seen in the Netflix documentary The Tinder Swindler, it can be increasingly difficult to identify who's rich and who's not (and there can be severe ramifications for those who fall prey to the trappings of flaunting wealth).

​The ultra risk-seeking partner

  • In today's day and age, it's never been easier to take on obscene risk. Whether it's online gambling, social media or meme stocks - technology has made it that much easier to get addicted to taking on risks.
  • There's a difference between calculated risk-taking in investments and outright gambling. In particular, gambling, compulsive spending, or consistently living beyond one's means are not just financial red flags but also potential indicators of addictive behaviour. These habits create financial instability that can severely impact your future together.
  • While there are lots of resources to support and help your partner (if you suspect they are overly risk-seeking or addicted to gambling), risk-seeking partners have one of the most significant impacts on a relationship's finances (given the large amount at stake).  

The partner that struggles to spend anything at all

  • Being frugal should never be looked down upon, and it often makes complete sense not to overspend on things that don't add value to our lives. However, sometimes people can go too far with this habit and struggle to spend anything (even if it would bring them and their partner deep life satisfaction and fulfilment). 
  • Colloquially known as the "penny pincher" (or worse), a partner that consistently struggles to spend on anything (or a partner that consistently dodges their share of expenses or conveniently 'forgets' their wallet) can cause significant strain on relationships.
  • While frugality might initially seem like financial prudence, such behaviours could indicate a disregard for your financial resources and an avoidance of financial responsibilities. 
  • If one partner wants something and thinks it's a great value purchase (such as an overseas trip to see family), but the "penny pincher" shows pain and can't bear to part with the $5,000 that it'll cost on flights and accommodation, the relationship will likely be materially impacted by the penny pincher's spending habits and behaviours.
  • There's no right or wrong approach. What's important is to ensure that each partner is comfortable and secure enough to spend money on things they value and that both of you value similar things. For example, if you enjoy your own private room and would prefer hotels, but your partner only wants to stay in hostels because they're cheap, there's likely a values misalignment here, and you'll need to find a middle ground or compromise.

​The “YOLO” spending partner

  • In contrast to the overly frugal partner, the “YOLO” partner spends the money as fast as it comes in. There's no time like the present, but if your partner doesn't budget and only maximises their lifestyle today or spends everything they have, saving for significant goals like homeownership or planning for retirement will be heavily impacted.
  • Delaying gratification and saving for a better tomorrow often requires a lot of time and discipline. A partner who makes little effort to prepare financially for the future might not align with your long-term plans, posing substantial challenges ahead for your relationship.
  • It’s not impossible to learn (and shouldn’t be a deal breaker so long as they’re willing to learn), but if there are clear signs that you’re not on the same page about the future, it can become problematic if not dealt with earlier.

The partner who’s constantly borrowing from others

Occasionally, everyone needs financial help, but frequent borrowing from friends, family, or even you could signal poor financial management. A partner who is chronically in debt or consistently asks for money from the people around them could mean a few things:
  • They have no disregard for others and are using their friendships and relationships in a transactional manner
  • They can't budget properly and rely on others to "bail them out"
  • They don’t take any accountability for their actions

The partner with debt difficulties

  • While debt is a significant part of many Kiwis' finances, being in a relationship with a partner who has a very poor credit score or who has declared bankruptcy in the past has a very significant impact on your overall ability to access finance (such as mortgages, credit cards, loans, etc.). 
  • A partner burdened with considerable debt, chronically accumulating high-interest debt, misses payments, and frequently opens new credit cards is reckless financially and harms credit ratings. This behaviour can have lasting effects, affecting your ability to jointly secure loans for significant purchases like a home.

The impulsive spender

  • An impulsive spender can create significant financial challenges in a relationship. This type of partner tends to make spontaneous and unnecessary purchases without considering the long-term impact on your financial health.
  • Impulsive spending can lead to mounting debts, depleted savings, and financial stress. It's important to recognise if your partner's spending habits are putting your financial security at risk.
  • ​While everyone makes impulsive purchases occasionally, a pattern of consistent impulsive spending is concerning. If your partner is unwilling to change their habits, it might be a sign of deeper issues that must be addressed to ensure a stable financial future together.

The financially dependent partner

  • Another significant red flag is a partner who relies heavily on you for financial support without contributing their fair share. While it's natural to help each other out occasionally, a consistent pattern of financial dependency can indicate deeper issues such as laziness, lack of ambition, or an unwillingness to take responsibility.
  • ​This scenario often arises when one partner is not working or earning significantly less and expects the other to cover most expenses. It can create an imbalance in the relationship, leading to resentment and frustration. In the long run, financial dependency can hinder your ability to achieve financial independence and security. ​

How Can I Address Financial Red Flags With My Partner?

The red flags listed above don't necessarily mean the end of your relationship, but they require open and honest communication. The most important thing you and your partner can do is to openly and honestly communicate about your finances or misaligned financial behaviours. People can always change, but some things are deal breakers for New Zealanders. We suggest the the following approach:

​1. Evaluate the severity of the issue
  • Not all red flags are created equal. A partner who’s a bit forgetful and has a small habit of not paying off their credit cards every month is probably not as severe as someone who actively hides their monthly trips to the pokies where they drop hundreds of dollars. 
  • Assess whether the red flag is an isolated incident due to unexpected circumstances or a persistent pattern. Also, factor in whether your partner wants to change. Sometimes, they are fully aware of their behaviours and think their partner will "enable" them, so they continue to behave this way until you decide to break it off with them. 
  • Evaluating whether something is a “deal breaker” is essential. No partner is perfect - you’ll never get someone who “ticks all your boxes”. A big part of relationships is compromise - so try to determine if there’s the potential for change.
  • Have a candid conversation with your partner about your concerns.

2. Approach your partner calmly and share your concerns.
  • Don't just assume their behaviours are fixed; you must make a unilateral decision. Focus on specific behaviours and (importantly) how their actions impact your joint future together. Connecting their behaviours to the long-term impacts of your joint future can sometimes help show the severity of the issue and indicate its importance to both of you.
  • Aim to discuss desired behaviours rather than just the problems (in other words, come up with potential solutions rather than just lecture them on their wrongdoing). 

3. Get impartial, professional help from an expert
  • If communication between partners proves challenging, consider consulting a couple's therapist. They can offer a neutral space for dialogue and guidance in managing your financial situation.
  • Discussions can often get overly heated or emotional (particularly regarding finances), and having an impartial third party in the room to help mediate the discussion can help overcome this problem. 

4. Know when to walk away (if your relationship is at a financial impasse)
  • While always considering the "nuclear" option, sometimes you've given your partner as many "benefits of the doubt" as possible before realising the discussion is no longer productive.
  • If your partner is unwilling to address the red flags or work towards financial responsibility, it may be time to prioritise your well-being. While ending a relationship is always painful, sometimes this option is the best long-term option that protects your future security and emotional health.
​​

Must Know Facts about Financial Red Flags in a Relationship

Know This First: The most important decision by far you’ll make in your life is who you choose to partner with. While you might think that the area you buy your house in, the career you pick, or the investment fund you choose is the most important financial decision, the most crucial financial decision is not necessarily about finances but about who you choose to partner with. The dynamics of a partnership can significantly amplify or undermine one's financial stability and growth.

As an example, the person you choose to partner up with has a more significant financial impact than pretty much everything else:
  • It's more than what KiwiSaver funds to invest in
  • More than whether you put a 10% or 20% deposit in to buy your first home
  • More than which suburb do you choose to buy an apartment in, and what type of property you want to have
  • More than the degree you choose to study or whether to enter into a trade school
  • More than whether you have a 5% or 50% savings rate​

1. Don’t marry for money, but don’t completely ignore your potential partner’s financial habits

It’s obvious but needs to be said - don’t just marry someone because they’re rich. Life and happiness are more than objective wealth. As detailed above, significant wealth is not always a predictor of good financial habits. Financial behaviours and approaches to relationship finances can play a far bigger part than just how much someone's got in the bank account. 

This guide might be overly financial - but we're not saying you should marry for money. However, it's essential to acknowledge that a partner's financial habits play a big part in your ultimate success as a couple. Partner with someone who aligns with your financial values and wants the same things you do - saving diligently, spending wisely, or planning for the future. These habits can profoundly impact your combined financial health and path towards goals like home ownership or early retirement.

2. Having a high income (single or joint household) isn’t an excuse to be terrible with money

Paradoxically, even high earners can find themselves in precarious financial situations if they or their partners indulge in excessive spending. While high earners have the luxury of large cash flow, many high-earning Kiwis justify poor financial behaviours because "they can afford it."

Conversely, couples who might earn less but share a common financial approach often have a much stronger financial position. It's about balance and mutual understanding rather than absolute income.

3. Don’t feel pressured to partner up just because everyone else is (especially in the context of costs)

While this guide has been written on the premise that Kiwis are choosing to partner up, that's not the only option. You don't have to partner up if you don't feel ready or don't want to (especially if you have doubts about your partner). Don't partner up just for financial reasons. 

Sometimes, staying single can be more beneficial than entering a financially unstable marriage. The risks of marrying someone with poor financial habits can't be overstated - they can lead to a lifetime of financial strain, regardless of their income level.

4. When in doubt, consider getting a prenup (especially if there’s an initial wealth disparity)

Know the implications of getting married (or staying in a relationship for 2-3 years onwards). Before marriage or after living together for three years, it's wise to consider potential future scenarios should the relationship dissolve. Under the Property (Relationships) Act 1976, your shared assets, including savings and
KiwiSaver contributions may be divided if you separate (assuming no prenup).

If you're worried about financial red flags becoming a big problem down the line, one potential way to "hedge" this risk is to get a prenup. While prenups will sometimes favour one party over the other (e.g., the one with more assets), it's better to frame it as each party deciding what goes on in the marriage or relationship and not letting the New Zealand Government (by proxy of family court) meddle into a deeply personal decision by both parties. 

Opting for a 'prenup' allows you to exclude yourselves from automatic asset division under the Property (Relationships) Act 1976 (which is the default if no prenup exists and there is a dispute). To pursue this, both partners should seek independent legal advice and sign a contractual agreement, a process that could take a few months. While they’re not 100% watertight all of the time, prenups can provide strong downside protection for both parties if things are so south further down the track.  

A prenup is a good way to navigate potential divorces (but they're only as good as their provisions). 

5. The biggest reason financial red flags need to be watched is due to divorce

Put simply - divorces are devastating for either or both parties (both financially and emotionally), especially without prenuptial agreements or when custody of children is involved. These financial setbacks can erase years of savings and investment gains, making divorce not just an emotional but a substantial financial crisis.

Rather than think of prenups as a negative (often, one partner suggests it, and the other partner reacts negatively, saying things like "so you think we're going to get divorced already?"), frame the prenup as not letting the NZ government or family court into your personal lives and setting your terms on the off chance you both decide to separate. In other words, negotiate the tough things now while you love each other rather than at the end of the relationship when things can get extremely hostile and bitter.  

Specifically, when one partner's family is very wealthy, there is a family trust-type situation, or the wealth dynamic between you both is drastic, a prenup will be very much warranted. However, it's incredibly important to know how to navigate those conversations and not alienate your partner on the grounds of wealth alone.

Make sure you both spend time openly discussing the right provisions in the prenup to ensure they fit the purpose of both of you.

6. Finances don’t have to be serious all the time

When it comes to finances, framing is everything. Ramit Sethi (A personal finance personality who's hosted the Netflix show How to Get Rich and published the book I Will Teach You To Get Rich emphasises that focusing on your "Rich Life", which probes the deeper questions of what positive experiences and lifestyles you could be living as a result of taking good financial habits - can help to positively align both you and your partner to live your future dream life. Framing your financial future in a positive light is much more motivating than nit-picking the negative/bad habits you have in the present (without a clear reason why). 

7. Ultimately, finances are only one piece of the relationship puzzle. Don’t obsess over it

Finances are important, but they aren't everything. If Kiwis obsess over every little financial detail, they may prevent themselves from living the best life they could be (e.g. when finances prevent them from going on certain dates, not taking trips, or spending on the things both value). 
Things like whether you both want kids (or not), whether you like the same hobbies or have the same political views are all equally important to financial considerations. 

​In the context of friendships, remember that relationships are about the connection between people - you don't need money to do this. It becomes a problem when "friends" take advantage (knowingly or unknowingly); however, if you prefer luxury travel or business class and have the wealth to pursue these experiences, that's great. But don't expect your friends to pay thousands if you decide to do this (or if you do, feel comfortable paying for them, given it was your idea). Selecting friendships based on people's ability to pay is a recipe for disaster and the antithesis of quality relationships with people.

8. Infatuation can (initially) make you overlook some financial red flags

We’re often attracted to a potential partner for all sorts of reasons - looks, personality, humour, values, hobbies, etc. Sometimes, through our interactions with them, we might notice or see indications that they're a bit loose with finances or may exhibit some of the red flags above. Often, we might give them the benefit of the doubt or be wilfully ignorant of some of these behaviours early on in the relationship.

However, after we've been with them for a while, those "small actions" might be much deeper and more systemic than initially thought. Try objectively considering what actions or behaviours are okay, which may lead to more significant financial impacts later.

9. Financial infidelity/cheating can hurt (financially) just as much as romantic infidelity/cheating

Don't underestimate financial infidelity. Secretive spending behaviours that heavily impact finances can severely impact wealth creation and finances. While getting romantically cheated on is clearly awful, financial infidelity can have significant ramifications that last much longer than the relationship. For example, getting deep into debt that impacts both of you (assuming you're a de-facto couple) has far-reaching ramifications, even if you eventually break up. There are countless examples of Kiwis who’ve been put in significantly worse financial or credit score positions due to their partner’s financial infidelity. ​

10. Not enabling your partner’s bad financial habits does not mean you don’t love them

Preventing your partner from going down the rabbit hole of poor financial spending, budgeting, or habits is in their best interest. You still want to empower them to make their own decisions, but when those decisions impact your joint financial position, you likely need to put your foot down. 

As much as you love your partner, do not do things that enable your partner’s actions or put yourself in a poor financial position (like act as a guarantor for their debts, take out a private loan so they can purchase things or pay off gambling debts, etc.).

11. Do semi-regular financial check-ins with your partner

Monitoring your financial health and planning your (financial) future can be a therapeutic and healthy activity with your partner. Regular financial check-ins with your partner or spouse help maintain open communication and collaborative efforts. This could be small things like whether you're paying your bills on time or more significant things. 

A few prompts you might want to raise include: 
  • Do you have individual or joint financial goals? How are you tracking towards this?
  • Are you both satisfied with how you're handling your finances (either separately or together)?
  • Do you have a separate or joint budget? How have you been adhering to your budget? Consider areas where you might cut costs, such as housing expenses, groceries, utilities, and subscriptions—Utilise budgeting tools to analyse your expenditures.
  • Review your KiwiSaver accounts to ensure you're in the appropriate fund based on your proximity to withdrawal for a first home or retirement and your comfort with fluctuations in your balance. Now might be a good time to reassess if you are uncertain about your fund choice or if it's been a while since your last review.
  • Consider evaluating your insurance needs. You might need to review your existing life or contents insurance or perhaps consider acquiring insurance for the first time.
  • If there have been changes in your circumstances, think about drafting a will.

12. Try to celebrate financial successes (or milestones) together

It's important to celebrate your financial progress. Watching your savings and KiwiSaver balances grow can motivate both of you to continue. Finances in a partnership don't always have to be strenuous. Celebrating both significant and minor achievements adds enjoyment. Consider setting up rewards for reaching financial milestones, such as a date night, a short getaway, or a shared activity.

13. The most important thing you can do to improve relationships is open communication

The cornerstone of effective financial management in a relationship is teamwork. Couples who share a common vision for their future can accomplish more together, whether purchasing a home, starting a family, travelling, eliminating debts, furthering education, or saving for later years.
​
With almost all relationship issues, the best thing you can do is communicate how you feel to your partner. While this won't automatically resolve anything, identifying and addressing financial stress and incompatibility early can help you manage issues (or, at the very least, decide if they are a deal breaker). 

14. Financial stress is subjective (and heavily driven by upbringing)

How is it possible that those Kiwis earning $150,000 to $200,000 can experience similar reported levels of financial stress than those earning less than $80,000? Like everyone has different pain tolerances, people also have different stress tolerances. 

Some people may feel comfortable with a few dollars in their bank account under financial stress. In contrast, others get nervous if their emergency fund drops below six months' worth of living expenses (e.g., $30k in a savings account). Try to understand that what stresses one partner may not stress the other—and that's completely normal and fine.

How you were taught and experienced financial stress or education in your early years will disproportionately impact how you approach your finances now. While financial education has never been easier with online resources and free videos on YouTube, it's also hard to reverse deeply ingrained financial habits and mentalities.   

For example, Kiwis who grew up in a financially unstable household (whether due to a lack of income, parents who've been made redundant, deep credit card debt, etc.) will naturally be significantly more anxious than those who grew up without having to constantly think about money daily.

Often, finances will bleed into other areas of life. For example:
  • How your partner views spending reflects what they value as a person.
  • How your partner views saving impacts how fast you’ll reach your goals.
  • How your partner views splitting bills or paying for things will impact your finances (literally from the bank inflow/outflows and figuratively from a power dynamic). 
  • How your partner views incomes and “share of responsibility” (if there is a non-equal dynamic) will impact your relationship dynamics.
  • Whether your partner wants joint accounts or keeps your financial accounts separate will impact visibility, transparency and trust in the relationship (financial and non-financial matters).

15. If you're uncomfortable discussing finances with your partner, it's normal, and you're not alone

For many, finances are a touchy subject. It's okay not to feel comfortable talking about it. Like any muscle, you'll get more comfortable discussing finances the more you do it. 

16. Nobody is born as a personal finance wizard - and everyone can learn

Keep expectations low and try to support your partner in the first instance rather than shame them for not being better with their finances. After all, if the positions were reversed, you would hope your partner didn’t write you off instantly and tried to help you along the journey. 

One core tenet of a good-quality relationship is helping each other grow in the areas they want to develop in (note: we are not saying you should try to change someone—only to support them if they want to make the change). It's acceptable if your partner hasn't completely determined their financial situation. Minor issues like occasional late bill payments, not owning property, or having a student loan shouldn't be deal breakers. Nevertheless, financial disagreements can strain a relationship if there isn't alignment on financial issues:
  • Conflicts over financial matters.
  • Frivolous spending (62%) is the most frequent cause of disputes, followed by financial anxieties (56%)
  • These concerns surpass disagreements over social media use (55%)
  • political views (51%), and 
  • past relationships (38%)

17. Relationships will likely become increasingly transactional as inflation runs rampant and the economy worsens

Given the current cost-of-living crisis, discussing finances and their potential impact on your relationship is more important than ever. Unfortunately, as times become tougher and relationships become increasingly about cost sharing. It's well known that single people get a raw deal and have a disproportionately high-cost base compared to couples (who can split the rent, power and broadband bills, food costs and benefit from more efficient transportation costs).

If any single person struggling to keep their finances under control given rising costs, getting into relationships to split the costs of living isn't such a ludicrous idea. Many such cases and anecdotes from New Zealanders have surfaced online given the drastic rise in interest rates since 2020 and all the cost pressures that have hit the economy.
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Frequently Asked Questions Related to Financial Red Flags in a Relationship

Are financial red flags deal breakers?

It depends. Ultimately, financial red flags are a sign that you may not be financially compatible with your partner. Financial compatibility doesn't mean having identical incomes, spending habits or values. It involves shared financial goals, open and respectful communication, and a commitment to working towards a secure and prosperous future together.

Remember that identifying financial red flags is like identifying other typical red flags in a relationship. Equally - we can't partner up with everyone. Ultimately, we want to find a partner who's as values-aligned as possible. Identifying (financial) red flags early ultimately saves Kiwis a lot of time, money, effort, and heartache in the future.

My partner isn’t good with money. What can I do about it? Should I break up with my partner if I’m financially incompatible with them?

Generally, it's recommended that you give your partner the benefit of the doubt and openly communicate with them about it first (following the steps listed above). However, if you're certain that they either don't want to change, are incapable of change, or both of you are just objectively far apart from a behaviour/finance perspective, then this can be a deal breaker. 

My partner has a bad credit history. Will this impact me?

A partner with a bad credit history usually directly and indirectly impacts your joint situation. In the first instance, their credit directly impacts their ability to get new credit (like applying for a new credit card). This will have an indirect impact on your household (meaning you might need to apply under your own credit score to increase household credit card access).

Another direct impact will be when you jointly apply for a mortgage or house purchase (where both credit histories alongside affordability are considered).   

I suspect my partner is hiding things from me, but I don't know how to ask them about it. What should I do?

It's always awkward/difficult to bring up financial conversations with a partner (especially if you're not used to doing so), but framing them positively to improve the relationship and not judging them (whatever they say) is usually the best way to approach this. 

I’m ashamed of my financial history and don’t want my partner to think worse of me (e.g. issues with tax or IRD, previous bankruptcy, defaulting on mortgage). What can I do?

We can't always choose what happens to us, and often, we're put in extremely difficult positions over which we don't have much control. It's completely up to us how we react and choose to act going forward. Generally, open transparency is the best policy with your partner, no matter how awkward or ashamed you may feel. 
If you're worried about how your partner will react, that's completely normal. However, you can't control how they react - and if they choose to react negatively, that's on them (although it's completely reasonable for them to be shocked). Ultimately, if you want the relationship to thrive in the future, sharing what you may have omitted in the past is probably the best move. 

I am in love with my partner, but I'm worried about their approach to spending and finances. What can I do? Should I break up with them?

Affection can be delightfully complex, but the complexities can intensify when financial matters come into play. Though trust, shared values, intimacy, support, and enjoying each other's company are crucial for a flourishing relationship, having financial harmony is just as essential for lasting stability.
Therefore, recognising and confronting possible financial warning signs early on is vital for safeguarding your future together.

How often should my partner and I talk about finances?

As often as you both feel comfortable. We recommend every quarter at the minimum, but ideally every month or more. Finances are such an important part of a relationship that they impact daily interactions (e.g., where to eat, when to pay rent, who's booking flights, etc.) that the longer you prolong these conversations, the harder it gets.  

I want to spend, but my partner wants to save. We're at an impasse. Should we break up?

Not immediately. Try to get at why a partner wants to save or spend. It can be harder to align if it's a matter of values (e.g., one partner values flashy new cars and material possessions, and the other values experiences or travel). However, getting to the heart of why one partner wants to save (e.g. for a home deposit) or WHY the other partner want to spend (to maximise trips and holidays with your parents before they can no longer enjoy those experiences) helps to get both partners on the same page (and the values gap may not be as big as both parties thing).

Are joint accounts better than separate accounts?

It depends. It's often easier to have both separate accounts (given that most Kiwis will have separate accounts before they get together with their partner) and joint accounts (to deal with household things like mortgage payments, childcare costs, rent, etc.). There's no "one size fits all"—some couples work completely off separate accounts, whereas others solely use joint accounts.  

I've been with my partner for a few years, but we're not married. Do I need a prenup? I feel awkward bringing it up

  • You can benefit from getting a prenup, even (especially) if you’re not married. 
  • Under New Zealand law, you become de facto partners with your significant other if you've been together for at least three years (although there are some instances where you are deemed partners earlier than three years). 
  • As a general rule of thumb, if you're considering a prenup for whatever reason (avoid the government meddling in your relationship, there's a significant wealth gap before you got together, inheritances, etc.) - getting one sorted after two years together is recommended.
Related Resources:
Prenups, divorce, separation, financial abuse:
Bankruptcy, credit Scores, finances:
Trusts, wills, death, estates, probate: