The Psychology of Money: Financial security has taken center stage in modern relationships—so much so that for many, it now eclipses traditional romantic ideals. A recent study by Simplii Financial reveals that more than two-thirds of Canadians consider financial stability a crucial factor when selecting a partner. Even more striking, over half of singles would end a relationship if financial incompatibility became a significant issue. This shift raises an intriguing question: Are we witnessing a pragmatic evolution in relationship dynamics, or does this emphasis on economic security reflect deeply ingrained psychological biases?
Psychologist and Nobel laureate Daniel Kahneman’s work on decision-making offers profound insights into this phenomenon. His dual-process theory, introduced in Thinking, Fast and Slow (2011), distinguishes between two modes of thinking: System 1 (fast, intuitive, and emotionally driven) and System 2 (slow, deliberative, and rational). When it comes to love, System 1 traditionally governs romantic attraction—sweeping emotions, chemistry, and instinctive connection. However, the growing prioritization of financial security suggests that System 2 is exerting greater influence, compelling individuals to assess relationships through a pragmatic, calculated lens (Kahneman, 2011).
This shift aligns with the principles of Prospect Theory, which Kahneman developed with Amos Tversky (1979). The theory explains how individuals weigh potential gains and losses asymmetrically, often overvaluing security and stability while avoiding perceived financial risk. In the context of relationships, this suggests that people may be instinctively risk-averse, preferring a partner with a solid financial foundation rather than one whose economic future appears uncertain. Love, it seems, is no longer entirely “blind”—it now carefully scrutinizes credit scores and savings accounts.
The numbers reinforce this trend. According to Simplii Financial’s survey, 74 percent of respondents would not enter a relationship with someone burdened by high debt, and 28 percent consider financial compatibility more important than physical attraction. This prioritization of economic stability may reflect the broader economic climate, with rising living costs, job market uncertainty, and increasing interest rates reshaping how individuals approach romantic commitment (Novakova, 2024).
Yet, while financial compatibility fosters relationship longevity, it also presents a paradox. Kahneman’s research highlights the prevalence of cognitive biases, such as loss aversion—the tendency to fear losses more than we value equivalent gains (Kahneman & Tversky, 1979). In relationships, this could translate into an overly cautious approach, where individuals dismiss potentially fulfilling connections due to financial concerns that might be mitigated through effective communication and joint financial planning.
The survey results further illustrate this communication gap. Nearly half of Canadians aged 18 to 54 report that financial stress strains their relationship, and 52 percent of couples find it increasingly difficult to manage finances together. Despite this, only 30 percent have a joint financial plan, and just a quarter follow a shared budget. The discrepancy between financial concerns and proactive planning underscores a critical issue: While individuals recognize the importance of money in relationships, they often struggle to address it openly (Simplii Financial, 2024).
A solution may lie in integrating financial transparency into relationship dynamics. As Kahneman suggests, effective decision-making hinges on balancing System 1’s instincts with System 2’s rational assessments. Couples who engage in regular financial discussions—such as implementing “financial dates” to align goals—can foster both economic security and emotional connection. This approach transforms financial planning from a transactional necessity into an intimate bonding experience, strengthening relational stability (Kahneman, 2011).
Ultimately, whether financial pragmatism enriches or undermines modern relationships depends on perspective. While the notion of love as purely spontaneous and emotionally driven is deeply ingrained in cultural narratives, the reality is that economic factors have always played a role in partnership selection. What differs today is the transparency with which these considerations are acknowledged. As the modern dating landscape evolves, perhaps the most profound declaration of commitment is no longer just I love you, but also Let’s talk about money.
References
Kahneman, D. (2011). Thinking, Fast and Slow. Penguin Books.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision Under Risk. Econometrica, 47(2), 263–291.
Novakova, A. (2024). Simplii Financial Relationship Study. Simplii Financial.
Simplii Financial. (2024). Survey Report: The Role of Money in Relationships. Simplii Financial.
