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  • Kevin Baker

Defining the Net Present Value of Relationships

Consumer debt is becoming a problem in the U.S. Approximately forty-three percent (43%) of Americans have carried a credit card balance for the past two-plus years. The average credit card balance for an individual American is $6,375 and the American household maintains an average balance of $16,883. Additionally, the typical American household pays an average of $1,292 in credit card interest each year. Surprisingly, the total amount of credit card debt in the U.S. has increased, surpassing over one trillion dollars.[i]


What does this mean? It means those we date or those with whom we pursue relationships are highly likely to carry some form or degree of debt. As a result, how we deal with that actuality and how we view those with debt as it pertains to our relationships is important. It means we must have a proper understanding of how these obligations will impact the relationship not only today but also in the future.


But why are money issues so important so early in a relationship? What is it about money that makes it one of the top priorities for those we date? Undoubtedly, dating or marrying someone with a large debt may impact the ability of that relationship to finance daily needs. It may also affect the couple’s ability to acquire housing loans or other long-term capital requirements normal in functioning and healthy relationships. In short, what we earn and what we individually spend has a direct bearing on the future well-being and opportunities in any relationship.


I think this phenomenon derives in part from a growing realization that there is a minimum living standard in the U.S. that assists the happiness and health of individuals. I think today we are less willing to start a relationship with someone earning below what we perceive to be a minimum financial threshold or who maintains liabilities beyond their capability to pay. We look at life and define our relationships not just by whom we enter the relationship with but also whether that relationship can sustain us at a comfortable level without compromise.


Today, the financing of relationships is one of the most complicated and difficult problems both single adults and married couples face. The inability to resolve money issues is a key driver of failure in many relationships and is by far one of the primary causes for divorce. How can this be? What is it about money that reduces relationships into a hissing pool of acid so caustic it dissolves love and ruins the connections we so desperately want and need? Is it the relentless pursuit of wealth, the lack or inability to acquire it, or the complexity of managing it? These questions and their resolution are important for us whether we are currently in relationships or we are hoping to enter them.


Naively, money wasn’t a concern for me when I first married. I wasn’t wealthy, but I had established myself in a stable career, I had paid off my student loans and my house, I had no consumer debt, and I had both short- and long-term savings. With two degrees in finance, I felt I had the skills necessary to be financially responsible, especially in the context of a family relationship. I thought if there was anything that would go right in the marriage, it would be the financial stability I provided. It was the mistaken belief the amount of money I earned would reduce the stress of its role, function, and management in the relationship.


I quickly learned money has significant impacts in the relationship, especially if individuals within that relationship have different ideas about its acquisition, its purpose, and its use. Where I had relative freedom and control over decision-making on financial matters prior to my marriage, after the marriage I had to account for the thoughts, desires, and wishes of my wife. I realize today the problems I experienced with finances generally weren’t about money itself, rather about significantly deeper relationship issues such as individual identity, trust, relational control, social status, and equality. Many times, these differences were so distinct we were not able to even discuss appropriate financial resolutions, which caused relational drama and unresolved conflict.


Relational failures relating to money are less about the lack of agreement on the allocation of resources and more about the inability of individuals to adequately discuss, agree, and resolve the underlying relational concerns. That is not to say that we should not be concerned about the actual finances of the relationship. We should. What it means, though, is we need to focus on understanding both the individual needs of each person and the collective needs of the relationship. We must also look for viable and fair solutions to the financial and underlying relational issues that meets both these needs. Those relationships that can balance the needs of each individual while meeting the collective needs of the relationship, especially over time, are those that have the best opportunity for establishing a healthy financial base that supports and enhances the relationship.


Financial planning requires a firm understanding of how much monthly items cost and how much disposable cash is available to spend. Financial planning also allows us to search for cheaper and more cost-effective methods of living. Finding inexpensive ways to live and relate to each other can be a fun challenge for everyone. Limiting our exposure to easy credit or to multiple credit cards will also help alleviate the temptation to overspend on the planned amounts. Financial planning is also about finding a balance of our own needs and those of our significant other. It is the ability to communicate about, implement, and be held accountable for the appropriate use of the relationship’s resources. For those looking to improve their budgeting skills, I recommend reading One for the Money, by Marvin J. Ashton. There are also many resources both in and out of the church that are beneficial on this topic.


Oftentimes, I hear single adults debate who should pay for dates, especially in the early stages of the relationship. I find it interesting one of the initial experiences couples generally have together with finances is the first date they go on. As gender roles have evolved over time, the earning potential and employment opportunities for both men and women in the relationship have increased. As a result, the subject of finances at a very early stage of a relationship is a chance for individuals to evaluate how they respond to financial issues in context of that relationship. Who finances the relationship activities is less important than making sure both individuals feel empowered, validated, and loved in the relationship. The truth is both individuals are equally responsible for this environment and for these feelings in the relationship. The more quickly we can discuss and resolve financial issues and participate in a mutually beneficial financial plan, the greater the chance that relationship will be healthy for all involved.


In the end, I don’t think anyone really wants to be loved only for the money or wealth they bring to the table, but I also know its importance in fostering and maintaining trust in a relationship. By defining appropriate safeguards and balance in our relationships regarding finances and by having early and regular discussions about it, we can develop the tools and means to manage relational assets in ways that uplift ourselves and our relationships.


You can find similar discussions and ideas about marriage and relationships in my book, The Greatest Worth: Finding Oneself in a Family Centric Faith. I hope you enjoy reading it.





[i] Jessica Dickler, “Credit card debt hits a record high. It’s time to make a payoff plan,” CNBC, January 23, 2018, https://www .cnbc.com/2018/01/23/credit-card-debt -hits-record-high.html.



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