Marriage & Finances On The Same Page

As you make your way into midlife you will inevitably encounter a growing number of peers who are on the verge of or who have already dissolved their marriages. For many of these couples, the self-reported cause of marital discord is disagreement over finances. In fact, financial disagreements are stronger predictors of divorce than other marital disagreements, based on research from Kansas State University. The researchers studied over 4,500 couples and examined a variety of marital and financial factors.

Assuming a couple (or one spouse) doesn’t want to argue over money, maybe hiding the inflows and outflows of cash can help? Probably not. A recent article in the Wall Street Journal highlighted an age-old infidelity that can drive a wedge between otherwise seemingly happy couples: financial infidelity. The article sites a number of studies which demonstrate the prevalence of one form of financial infidelity: spending money and actively concealing it from the other spouse (who presumably would object to the spending).

Why would someone want to hide their spending? One theory cited in the article is that, like any other addiction, spending addicts don’t want to stop their habit, and they have been confronted by their spouse before with regards to spending. Another more common issue is that there are vast differences in the approach each spouse has to money. The author gives this advice to those in the spousal relationship who hold the keys to the castle, so to speak:

In households with more discretionary income, secret spending is more often an act of rebellion against control, an attempt to re-assert independence. While keeping an iron grip on family finances can do wonders for your net worth, it can cause a spouse to sneak around–and it might be a sign of the need to loosen the reins to preserve the marital peace.

Having a supportive spouse is a key factor in the success of high- and ultra-high net worth Americans. Likewise, we know that spousal congruence/agreement on finances is a reliable predictor of net worth, regardless of one’s age, income, or the percentage of net worth that has been inherited. Agreement, though, takes work: it takes communication, patience, setting goals, and finding ways to help each other achieve those goals, especially if each person brings very different financial values, attitudes, and behaviors to the relationship.

Given that divorce is so costly, finding a middle ground on finances could be the wisest money decision a couple makes.

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