Yes, Money can Mess up Marriages!

marriage and moneyThis morning as I was returning from my early morning gym routine, I listened to NPR’s Chris Arnold’s report on “How to Keep Money From Messing Up Your Marriage.”  He provided another story of a seemingly successful couple who were on the verge of divorce over money.  The husband was making more than his working wife and since they were splitting expenses down the middle, she always felt broke, frustrated and had developed overwhelming resentment. Quelle Surprise! It’s true- money can mess up marriages of all ages, income and assets.

Certainly, money isn’t the only source of marital conflict.  There can be disagreements about children, chores, communication and work.  But, money is certainly the most difficult to resolve. It’s often very difficult for couples to talk about money issues and resolve them.  Money can represent more than dollars and cents.  It can be used to express feelings and relationships.  It can be given to express love, power and respect. And, it can be withheld to humiliate, punish or control.

First, let’s look at five biggest blunders couples make with money based on a CNBC article a year ago:

  1. Believing that “love conquers all.” It takes hard work, communication and commitment to successfully manage money as a couple. Here’s a quiz you and your spouse can take and discuss:

Couples who enjoy a good relationship with money often have shared values, an appreciation of their partner’s perspective and an ability to find common ground.

  1. Practicing money silence. Often this silence is passed down from generation to generation, leading to miscommunication, misunderstandings and hurt feelings.  It is often the reason marriages end up in divorce and children become financially unprepared adults.
  2. Avoiding financial conflict. One recent survey showed that 80% of spouses admitted to hiding some financial purchases from partners-presumably to avoid a fight over the item. Not a good idea.  When you don’t openly discuss money you miss an opportunity to understand your partner’s viewpoint and resolve a problem in its early stages.
  3. Waiting to be financially rescued. Don’t blindly put your financial future in someone else’s hands.  If they die, become disabled or leave, you may have real problems.  Take adult responsibility for your money even if it is not your strong suit.
  4. Meeting with your financial advisor alone. While it may be more time efficient to delegate certain tasks, this is an important one to perform jointly.  It’s a great opportunity to talk about money together in the midst of your informed, caring, objective wealth manager, to understand and resolve financial differences and to make decisions about your future as a team.  In addition, if something happens to one of you, the other is not in the dark.

The commitment to work together for financial harmony should start early.  Couples considering marriage and newlyweds need to do the following:

  1. Give Yourself a Financial Checkup. Only about half of couples today know their partner’s credit score before marriage.  You need to know each other’s spending habits and preferences.  Understand your partner’s debt situation, if any, and work together on getting it paid down.
  2. Start to Develop Sound Savings Habits. Consider putting at least 10% of your combined income into savings each month before you are married.  Calculate what your share of the wedding costs will be and how you will fund and attain that goal together.
  3. Create a Budget. Put everything “on the table” including yours bills, obligations, income etc.  Group your expenses into needs, wants and wishes.  Make sure to budget for the wedding and honeymoon. And, agree on an amount of “fun money” each of you can spend each week or month without talking to the other first.
  4. Split up the Task of Finances. Once married, both should be part of the process.  One might pay the bills (pretty easy these days online), one might recap the finances monthly, one might be responsible for income taxes, one for insurance, etc.  You are accountable to each other.
  5. Decide how best to manage your money. Combine your funds into a joint account, use separate accounts, or keep separate accounts that link into a new joint account.
  6. Once married, update beneficiaries, withholdings and other paperwork. This applies to 401(k) s, life insurance, W-4s at work, etc.
  7. Have a Financial Date at least once a month. Talking about money should be a healthy, ongoing conversation.  Talk about your combined progress toward meeting your financial goals, future financial decisions and corrections, if needed, to your plan.

Unfortunately, love does not conquer all.  Our experience at DWM working with couples of all ages, incomes and assets over decades has shown us that hard work, commitment, regular communication, understanding of a partner’s perspective and an ability to find common ground is what is required to keep money from messing up your marriage.   Money can’t buy you happiness.  Yet, working and talking together about money goes a long way.