What are the common causes for divorce? Annoying habits, incompatibility, prioritizing work over family, and cheating on your spouse. But the #1 reason is money. Ongoing financial problems lead to tension, stress, arguments and ultimately divorce.
Quarrels about finances can put enormous tension on relationships between a spouses. Official statistics reported other non-financial reasons for couples separation. The reasons include annoying habits or incompatibility. But the true reason started with disagreements on finance issues. This tension continues and spreads to other areas of their life. That loving feeling dissipates and at the end divorce is inevitable. Is this where all relationships will end up? Not necessarily provided you get a handle on the below 7 money areas that can ruin your relationship.
1. Wedding Overspending
Overspending on the wedding is setting the stage for marital disaster.
Are you a big fan of large scale lavish wedding festivities?
Depending on how elaborate you want it to be, the of cost weddings can put a serious dent in your bank account and/or rack up serious debt! For example, a Chinese wedding in Kuala Lumpur, the capital of Malaysia can run up to six figures! The more glamorous and lavish you want, the more money is required. Doubly so with an open bar that is often viewed as a cultural norm.
But how does a cost of a wedding related to the marriage duration? Is it true that the more I spend, the longer my marriage will last? Will my wife will love me “more” because she should be very happy and proud that her wedding was the best? All of these perceptions are wrong!
According to research done at Emory University called “A Diamond is Forever and Other Fairy Tales” marriage duration is inversely associated with spending on the engagement ring and wedding ceremony.
This means not only is it a bad idea financially to spend a lot on these things, but higher spending leads to a greater likelihood of divorce.
2. Financial Expectations
Financial expectations before marriage and financial realities after marriage are a complete opposite
What do you know about your soon-to-be spouse? Finance-wise, is he or she stable? Does his or her financial stability have any effect on your decision to be your life partner? I am not suggesting that financial success be the main criteria for selecting a spouse, but it is surely worth to consider as financial arguments are well known as the no. 1 reason for a divorce.
Tying the knot soon? Recently married? Share your key financial information now! Relationship experts agree it is not going to be comfortable but you have to do it. One spouse’s debt has a significant impact on the household finances.
If you love your other half, you should come clean. Share with them the problems and vices you face. If not, these could affect the relationship with your spouse. They ought to know what they are getting into. If you display commitment and the willpower to get rid of your internal issues for the sake of the family, your better half will be with you through the end. If they leave you due to your open-ness regardless of your promise to resolve the shortcomings, then good riddance. He or she is not your life partner.
3. Differences in Income
“Higher salary = higher voting rights” in decision-making?!
In a marriage, it is no longer just about you or me. It’s all about us. You are no longer single where you used to make your own decisions. Unlike being a singleton, a couple has to function as a team on matters affecting the family. Decision-making must be consultative regardless of individual earnings. Earning power is not a reason for being the overriding decision maker.
But, it’s best to agree earlier on who will take charge of handling the household finances. Usually, one spouse is interested in doing that as he or she managed it well when single. The couple should also decide on who should take care of money chores like bill payments.
Do always bring big expenditures to the table for discussion and decision. For example, a car, investment, television and holidays. The decision on a high-value purchase may impact the immediate short-term cash flow.
4. No Household Budget
You pay for this, I pay for that lah.
Running a household without a budget is setting the family up for a financial disaster.
To keep it simple, many couples agreed to take care of a bunch of expenses each. Incomes of spouses are not pooled as household income. There are no expenses tracking and monitoring, no budget set and no financial plan for the household. Managing the household finances is non-existing. As a result, the household finances are mess up resulting in family arguments.
Every household must have a budget and expenses tracking should you wish to manage your money well. Knowing your income is easy. But identifying where you spend the money is a problem if you are not tracking it.
Yet, few families have a budget. Generating a budget and tracking the expenditures are tedious. But the benefits are much more valuable. Family arguments will arise when one or both spouses do not know where their money is going. Budget and expense tracking will help you know where your spending goes.
With the plethora of free online tools, budgeting is now much easier. You can track all your expenses on spreadsheets, websites, or apps. There are many great budgeting software available. So, it is worth reviewing budgeting tools and selecting the one most suitable for you.
5. Secret Spending
Keeping secret monetary spending leads to financial infidelity and trust issues.
For example, a husband bought more DIY tools than he was supposed to, and he is keeping it a secret from the wife. In another scenario, he dipped into the joint savings account, without informing his wife, to settle debt borrowed on a bad investment loss.
Not telling your spouse of your not-budgeted-for expenses or worse, lied about it, can create marital mayhem. But, to the husband, it is not a big deal but for the wife, it is a big deal. It’s not about the purchase. It’s about being informed and telling the truth. In such instance, losing faith that comes from the lying is more harmful than the initial action of buying the stuff.
Don’t get yourself accused of financial infidelity. It is not a financial disaster to purchase something on sale. But it is a big deal when you lie about it. Why do you have to lie? The more you do your own thing and try to cover it up after the fact, the more you undermine whatever joint vision you are working toward as a team
How to avoid it? Simple. Just tell the truth! Every spouse has secrets kept from the other spouse. It’s okay provided keeping them a secret would not harm your spouse or the relationship, but, not on matters affecting household finances! It is important to be transparent and honest as this involved joint financial goals. To meet the goals required commitment, discipline, and trust from both spouses. Otherwise, there is no point in having a household budget.
6. Spending Like You’re Single
Keeping the same money habits and mindset as if you are still single is unsustainable.
For illustration, the husband is a carefree happy-go-lucky chap who does not appreciate restriction and planning. He spends as he wishes. But, the wife is a complete opposite. She is a meticulous person and set goals for the year, month, week, and even have hourly plans for the day! That’s why the saying “opposites attract” is true… at least from a romantic sense.
When it comes down to the nitty-gritty after marriage, being opposites may not attract any more. Being single and married are two different stages of a person’s life where priorities are different. After you are married, you moreover have new dependents if you start a family. With new expenses arising (children expenses, the mortgage on a new house, a new family car) but having the same income level, spending freely as if you are still single will cast doubt on the family future financial security and stability.
This happy-go-lucky spouse needs to wake up and realize that they are no longer single. He or she needs to reset their priorities and spending habits. Getting married and starting a family places higher responsibilities on the couples’ shoulders. They must save money for big expenses such as healthcare, education fund, and the mortgage on the new house. The family is the priority now. Everything else takes a backseat.
7. Overly Restrictive Spending
Overly restrictive spending will backfire! Set aside money for fun guilt-free spending.
The need to discuss with your other half about each one of your purchases can be frustrating. An argument may arise when you need to explain and defend a purchase that your spouse does not approve of. A too-strict budget with no room for some frivolous spending may give rise to financial infidelity. For example, a spouse spends on not-budgeted-for things and not telling the truth about it.
Many relationship experts recommend having distinct allocations or “fun money” for frivolous spending. Each month, spouses can spend a certain amount on things they want. No explanation needed. It gives some breathing space and will do wonders for the relationship. But, both spouse must keep in mind to stay within the overall budget.
Being frugal in our spending does not mean we need to lead a boring life. Remember to enjoy life. Money earned is meant to be spent, but do spend on what is needed and within reason.
Seek Financial Counselling
Seek financial counselling through a financial advisor and a marriage counsellor.
If arguments on money have become a norm in your daily life and you are contemplating separation or divorce, stop for a minute to think. Do you want to save this marriage? Is the strain in the relationship due to money? Do not let money, a piece of paper, or a number in an account control your happiness and life. Think about the reasons you married your spouse.
Please give it another chance if there is hope to make it work again. Get professional help who can get both of you back on track. It might be a personal finances advisor, pastor of your church whom both of you respect, and/or a family therapist. There is even a new growing discipline called “financial therapy” that helps couples navigate financial turmoil.
Does the above resonate with you or have you experienced money issues affecting your marriage? If you find this article useful, please share with your network.
He has 25 years working experience in different finance-related jobs. He is now a consultant, and personal finance and business writer. His main goal is to help and educate non-finance professionals to understand and solve their personal finances problems. He believes everyone should be financially literate because everything we do has money implications!
Eric currently resides in Kuala Lumpur, Malaysia with his wife and two young children.