Financial Challenges in International Relationships
Cultural Differences in Financial Values and Priorities
In today’s interconnected world, people are forming relationships that cross borders and cultures more frequently. These relationships bring with them cultural differences in financial values and priorities resulting in unique challenges in managing finances within these relationships. Failure to address these differences can result in misunderstandings and conflict. This blog, the first in a series, will examine a few of the common differences in financial values and priorities across cultures and offer tips on managing them.
Cultural Differences
One of the most significant cultural differences in financial values is that many Asian cultures highly value saving money and consider it essential for long-term financial stability (Huang & Kim, 2017). In contrast, many Western cultures prioritize spending and enjoying life in the present. This difference in values can lead to conflict in relationships, especially when it comes to decisions about big purchases or investments.
Another cultural difference in financial values is that many African cultures highly value communal wealth and often make financial decisions with the good of the community in mind (Tung, 2008). In contrast, many Western cultures prioritize individual financial goals, such as saving for retirement or buying a house. This difference in values can lead to misunderstandings and conflict in relationships, especially if one partner feels that their individual financial goals are not being prioritized.
Finally, cultural differences in financial priorities can also extend to attitudes toward debt and credit. Many Middle Eastern cultures highly stigmatize debt and prioritize avoiding it at all costs (Williams & Baláž, 2013). In contrast, many Western cultures are more comfortable with using credit to finance big purchases or investments. This difference in attitudes towards debt can lead to conflict in relationships, especially if one partner feels uncomfortable with taking on debt while the other sees it as a necessary part of achieving their financial goals.
So, how can you navigate these cultural differences in financial values and priorities in your international relationship? Here are a few tips:
Overcoming Cultural Differences
- Communicate: Communicate openly and honestly about your financial values and priorities. Don’t assume that your partner shares your assumptions about money. Take the time to talk about your attitudes toward saving, spending, debt, and financial goals.
- Be Respectful: Be respectful of each other’s cultural backgrounds and values. Remember that there is no right or wrong way to approach finances – it’s all a matter of cultural perspective.
- Compromise: Find common ground and compromise. Identify areas where you can work together towards shared financial goals, and be willing to compromise on other areas where your values may differ.
- Seek Professional Help: Seek out professional advice if needed. A certified financial planner can help you navigate the complexities of international finances and develop a plan that works for both partners.
Cultural differences, when it comes to financial values and priorities, can pose unique challenges in international relationships. However, by communicating openly, being respectful of each other’s cultural backgrounds, finding common ground, and seeking professional advice, you can successfully navigate these challenges and build a strong financial foundation for your future together.
Conclusion
If you are in an international relationship, or are contemplating it, and want help navigating the financial nuances involved, consider Avery Rock Financial. We are a small but growing Registered Investment Advisory firm in the central Maine area. We offer investment advice to people from all walks of life, including first-hand experience with financial matters dealing with international relationships.
References
Huang, L., & Kim, H. J. (2017). East-West cultural differences in financial decision-making: A literature review. Journal of Behavioral and Experimental Finance, 15, 35-49.
Tung, R. L. (2008). Cultural differences in international business: A review and integration of the empirical research. Journal of International Business Studies, 19(1), 89-98.
Williams, K., & Baláž, V. (2013). Culture and personal finance management. International Journal of Consumer Studies, 37(5), 515-522.
Avery Rock Financial, LLC is a registered investment adviser. The information in this material is for educational purposes only, is not intended to predict or guarantee future market performance, and is not intended to act as individualized tax, legal, financial, or investment advice. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Please consult a qualified attorney or tax professional for individualized legal or tax advice. Please contact a financial advisor for specific information regarding your individualized financial and investment planning needs.
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