Money and Marriage

Do you know your partner’s credit score?  How much debt does he have?  How much does she have in savings? Do you have a budget together?  Do you know what your partner would do if she won the lottery—spend the money on shoes, clothes, and a new car, donate it to charity, or buy a new home for her parents, or quit her work and travel the world?  Do you know what your partner’s biggest fear is about losing his job?

If you don’t know the answers to these money-related questions, you probably should.

Supposedly, money issues are one of the leading causes of divorce.  Dave Ramsey thinks so and talks about the effect of money issues on a marriage, particularly because of what money means to people.   Other  studies seem to indicate that money issues don’t cause as many problems as reported, in part because of over-reporting of “money issues” as a reason for divorce, instead of honing in on what the money issues really meant for the couple.  No one says, “I am such a tightwad about money that my partner had to work a part-time job just to pay for our child’s soccer equipment,” or “I can’t control my spending so I accumulated a lot of debt without my partner’s knowledge and when she found out

In my experience with divorcing couples, money often seems to be a big issue, either as a cause of the divorce or as a result of the divorce.  I tend to think that whatever money issues a couple had before deciding to divorce are magnified during the divorce process. And, if there weren’t significant money problems before the divorce, divorce tends to wake up those little issues that were never really that important when the couple was getting along. The saver is now a miser.  The generous spouse is now a squanderer.

Heck, the most famous divorcing couple right now is fighting over money in joint accounts, though it doesn’t seem that money was the prime cause for the breakup (so says the media).  But, of course, now that they are fighting, it’s an issue.  Jon took money from the joint marital account and Kate can’t pay the bills without that money.  They had to go to court to get that resolved (through contempt)  and I’m sure their lawyers aren’t working pro-bono on their cases.

Generally, I tend to agree with those who think that money issues are a leading cause of divorce, not so much because of the money itself, but rather what it means to us and the role money plays in our lives.  Even couples with more money imaginable fight about money. How we handle money can be seen as an indicator of our own values. Do you overspend just to keep up with the Jones’ or so that your children have the latest tennis shoes, even if it means paying 25% interest on those new shoes?  Do you forget to pay bills and not tell your partner because of shame or embarrassment?   Do you lie about your income?   Do you donate to charity? Do you like to buy a new car every few years or is it OK to drive a reliable beat-up car until it dies? How much do you spend on gifts for friends and family and why do you spend that amount?  You get the idea…it’s not the money, but rather what we do with the money that poses problems in our relationship with our partner.

So, what can a couple do to minimize conflict about money in their relationship?  It seems communication is the answer. Open and honest communication….the kind where each person puts all of their fears and concerns on the table.  Dave Ramsey talks about how to save your marriage in this economy, primarily by focusing on the spiritual element of money, or rather, not the money itself, but what you do with that money. Other suggestions for improving communication about money including taking time to think about the root cause of the money argument.  Is it really about the bounced check, or is it more about control and trust? If trust is lacking in the relationship, money mishaps are more likely to become a reason for an argument, whereas in a relationship based on trust, the mishap is likely to be received with compassion and forgiveness.

If you’re not married, but considering tying the knot one day, it is especially important to communicate openly about money before walking down that aisle.  A recent NY Times article suggests that couples share credit reports as well as stories about early childhood memories about how money was handled in their household.   In her book, Intellectual Foreplay, Eve Eschner Hogan provides a series of questions for couples to ask each other and discuss, preferably before getting married.  Some of the questions related to money include:

• Do you feel competent managing money?
• Do you trust yourself with a credit card?
• Do you go shopping as entertainment or as a necessity?
• Do you have any outstanding debts?  If so, how much?
• How do you feel about loaning money to family and friends?
• What are your feelings about prenuptial agreements?  Would you be willing to sign one?
• If living together, or planning to, who pays the bills?
• Who makes decisions about major expenses or purchases?
• If you won the lottery, how would you spend the money?

These may seem like uncomfortable questions to ask your partner, but I’d venture to say that divorce is more uncomfortable.  And, divorce costs both partners a lot  (both financially and emotionally) and tends to put each person in a worse spot financially than before the split. It’s not rocket science-two households are more expensive to maintain than one and divorce attorneys aren’t cheap.

So, to save money on divorce (by hopefully not needing to get one) and meet your financial goals, both personally and as a couple, talk about money and talk about it a lot.  The first time you talk about money and your marriage should not be with your divorce lawyer.