Conflicts around money and finances are one of the main reasons couples get divorced. A study from Kansas State University for the National Survey of Families and Households reported that “arguments about money (are) by far the top predictor of divorce.”
That same research also found that marital arguments about money were usually longer and more intense than arguments about other matters. So, what exactly is it about money that causes conflict?
Being Financially Overextended
Most couples start their marriages in debt of some form or other-whether it’s student loan debt, a car loan, mortgage debt, or credit card debt. Carrying a significant amount of debt causes tremendous stress to a marriage.
A typical example of being financially overextended is when a young couple buys a home that ties them to a mortgage they can barely afford.
And debt is a significant cause of stress for many couples, regardless of income. People on large incomes can overspend as easily as those on lower incomes. To manage your debt, you must agree on a common approach to spending. And stick with it.
Inability to Compromise on Spending
If a couple is unable to compromise on spending and cannot reduce their debt, this will cause tensions to rise. Unless something drastically changes, such couples are on a potential “collision course.”
Opposing Views on Money
When two people come together in a union, they often bring with them different beliefs about money. Beliefs that were ingrained from their upbringing. Conflicts arise when these beliefs around money are opposing.
One person may be very careful with money and the other may be free with how they use money. To some people, money means security; for others, it means status; to others, a great lifestyle.
Your broad view of money will determine partly how you spend it and the level of consideration you have for how your partner prefers to use money. Some people appreciate seeing their savings accounts grow and others prefer using money for the finer things in life.
Instead of judging your partner, acknowledge that it is merely another point of view coming from a different background. Communicate your differences. Come to a compromise.
Trust and respect are the foundation of a strong marriage. Infidelity of any kind breaches these values and can create rifts. Just like sexual infidelity, financial infidelity, can erode trust and lead to marriage breakdown.
Financial infidelity shows up in numerous ways. Holding a secret bank account, a credit card ‘maxed out,’ or hiding purchases are all examples of financial infidelity. Resolve this before it reaches a breaking point.
Complications from Combined Bank Accounts
Most married couples choose to combine their accounts. You are not obligated to do this. Combining accounts can be a source of conflict. One person may feel constrained by this, and the other spouse may feel liberated.
It may create less tension if accounts remain separate. Another option is to maintain three accounts — a joint one and a separate one for each partner. Maintaining joint or separate may also be beneficial for tax reasons depending on your situation.
It’s Never Just About The Money
Arguments about money are rarely about money. They are more about security, freedom, and connection. Money is a tool that provides a couple with a sense of security, freedom, and connection.
When conflicts happen because of money, it is usually more about underlying issues in the relationship. Sometimes, couples avoid the subject of finances, knowing that it will lead to an argument. Avoiding discussions about your finances can damage your marriage.
The effects of conflict about money can cut deep into the well-being of a relationship. Is the issue of money worth destroying your relationship?
Before You Say, “I Do”
Start having conversations with someone you’re dating long before you decide you get into a commitment. Here is a list of things to do before you say, “I Do.”
● Discuss your goals — individually and as a couple.
● Prioritize those goals. Do you want children before you can afford a home?
● You come from different backgrounds. Discuss what money means to you personally — this will shed light on your relationship to money. How did your parents manage their finances? Were they generous, cautious, prudent, or just lived for today?
● What’s your tolerance for debt — Just as people have different risk tolerance levels, some people are more comfortable carrying debt than others. Some are so uncomfortable with any level of debt that they may not want to buy a house till they have a sizeable down payment.
● Discuss whether you want joint accounts or would prefer to keep things separate.
● How will you share the costs of running a home?
● Talk about your past experiences with money. Were you from a family with money? Or Not?
● Disclose all debts, assets, and financial obligations. It is one way to get real!
● Discuss the issue of control — how much control does each person feel they need in finances. For example, how much is your partner allowed to spend before you feel a need to know what’s been purchased?
● How will you deal with conflict regarding money?
Money touches all aspects of life. Avoiding discussing the topic of money with your partner will eventually result in conflict. The sooner you address these, the better.