Relationships and Finances: The Good, the Bad and the Ugly
George Boelcke FCI
May 16, 2007
What effect does money have in a new relationship? OK, you might not marry for money (at least I hope you didn’t or wouldn’t!) – but that’s exactly what you’re likely to end up with, as a bonus to getting married.
According to a study by research scientists at Ohio State University, it really does pay to marry! Their study tracked over 9,000 people for more than 15 years, which makes it pretty comprehensive.
On average, singles increased their assets from $1,500 to around $11,000 over the fifteen year study. But married people grew their assets almost twice as fast. Some of the reasons are no-brainers, because two households are a lot more expensive to keep up than one. But perhaps it’s also linked to having more of a motivation to save, buy a home, start putting money into retirement plans, or just manage spending a little better. After all, it’s now two people making bigger financial decisions together.
In relationships, we weigh the consequences of some of our borrowing, or debt decisions. a little more carefully, and let’s face it – it’s likely that one partner is a saver and one – well isn’t. So it certainly increases our level of responsibility when it comes to money issues when there’s more than just yourself to think about. Let’s hope nobody feels money is the primary reason to get married, but it’s certainly a nice payday down the road.
On the flip side, we knows that divorce is expensive, but a lot more so than we might think. Studies show that four-fifth of net worth is wiped out in the event of a divorce, and most times it can also involve running up some huge debts and credit card balances.
And for married couples, what would you guess is the percentage of couples who say they fight over their finances? 75%. And what purchase is the biggest source of disagreement? Well, 40% of couples say it’s about a vehicle. These stats come from an Investors Group survey where one-quarter of couples rate their disagreements over finance issues as severe. Yikes!
There’s one other piece of news that always shocks and amazes financial people: You’d be surprised how many couples keep debts and credit card balances from their partner. Make sure that’s not happening in your relationship, because your partner will find out – sooner or later. You wouldn’t hide it if you weren’t ashamed of it – but isn’t your partner the one person you can, and need be honest with, and know he or she will still love you?
The most successful relationships, from a money standpoint, are those where partners share a financial philosophy, goals and dreams. Plus, couples are much more likely to be on the same financial page, and when they actually talk about their finances openly, honestly and often.
Compromise and communicate - and that needs to happen before it becomes a big issue when the battle lines are drawn, money is used as a weapon and the last comment will generally be “well, it’s my money, I worked hard for it!”
In any relationships it’s not about “mine and yours.” It’s about shared values and an agreement of what you want to accomplish with it, when it’s OK to borrow, and what’s important to save for. Don’t make money a reason to fight – your relationship will always be more important than a few dollars. That’s something to remember in the heat of battle when we spend more time wanting to be right instead of happy.
According to a study by research scientists at Ohio State University, it really does pay to marry! Their study tracked over 9,000 people for more than 15 years, which makes it pretty comprehensive.
On average, singles increased their assets from $1,500 to around $11,000 over the fifteen year study. But married people grew their assets almost twice as fast. Some of the reasons are no-brainers, because two households are a lot more expensive to keep up than one. But perhaps it’s also linked to having more of a motivation to save, buy a home, start putting money into retirement plans, or just manage spending a little better. After all, it’s now two people making bigger financial decisions together.
In relationships, we weigh the consequences of some of our borrowing, or debt decisions. a little more carefully, and let’s face it – it’s likely that one partner is a saver and one – well isn’t. So it certainly increases our level of responsibility when it comes to money issues when there’s more than just yourself to think about. Let’s hope nobody feels money is the primary reason to get married, but it’s certainly a nice payday down the road.
On the flip side, we knows that divorce is expensive, but a lot more so than we might think. Studies show that four-fifth of net worth is wiped out in the event of a divorce, and most times it can also involve running up some huge debts and credit card balances.
And for married couples, what would you guess is the percentage of couples who say they fight over their finances? 75%. And what purchase is the biggest source of disagreement? Well, 40% of couples say it’s about a vehicle. These stats come from an Investors Group survey where one-quarter of couples rate their disagreements over finance issues as severe. Yikes!
There’s one other piece of news that always shocks and amazes financial people: You’d be surprised how many couples keep debts and credit card balances from their partner. Make sure that’s not happening in your relationship, because your partner will find out – sooner or later. You wouldn’t hide it if you weren’t ashamed of it – but isn’t your partner the one person you can, and need be honest with, and know he or she will still love you?
The most successful relationships, from a money standpoint, are those where partners share a financial philosophy, goals and dreams. Plus, couples are much more likely to be on the same financial page, and when they actually talk about their finances openly, honestly and often.
Compromise and communicate - and that needs to happen before it becomes a big issue when the battle lines are drawn, money is used as a weapon and the last comment will generally be “well, it’s my money, I worked hard for it!”
In any relationships it’s not about “mine and yours.” It’s about shared values and an agreement of what you want to accomplish with it, when it’s OK to borrow, and what’s important to save for. Don’t make money a reason to fight – your relationship will always be more important than a few dollars. That’s something to remember in the heat of battle when we spend more time wanting to be right instead of happy.
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