For more than one-third of couples who split, attitudes about money are at the root of their discontent, according to a survey conducted by SunTrust Bank. Other factors may compound the problem, but the distinct differences in the way you and your spouse think about and handle money are often the underlying reason for a marriage’s problems.
According to research by the Federal Reserve Board, the greater the mismatch between a couple’s credit scores, the more likely they are to separate within the first five years. As go financial commitments, so go commitment to relationships. “Credit scores and match quality appear predictive of subsequent separations even beyond these credit channels, suggesting that credit scores reveal an individual’s relationship skill and level of commitment,” say Fed Reserve researchers.
Long story, short: Credit scores reflect the person’s responsible borrowing habits, and provide a snapshot of an individual’s ability to meet financial commitments. Those with the highest credit scores were most likely to form long-lasting committed relationships. Likewise, the better your financial footing and the higher your credit score when a committed relationship starts, the less likely the couple is to break up after the first few years. But wealth does not equate to financial responsibility and security. Even millionaire couples who appear to be financially set, can have great disparity in their money-handling habits.
Money-management disparity doesn’t mean one person is right and the other wrong. But it does signal distinctly different priorities when it comes to spending and saving. Jessica Dickler, personal finance writer with CNBC.com outlines five specific money mistakes that can damage a relationship. If you or your spouse has one of these five red flag financial habits, money may be the root of your marital discourse:
- Hiding Money. Although there’s nothing inherently wrong with keeping separate accounts, intentional deception of any kind may indicate relationship instability. If you’re guilty of this behavior, you’re not alone. According to a 2018 survey by the National Endowment for Financial Education, two out of every five couples commits financial infidelity.
- Hiding Debt. Again, honesty is the best policy. If you are keeping your credit card or student loan debt a secret from your spouse, it could be an indicator of greater insecurities and challenges.
- Overspending. When you’re married, what you spend your money on can be as important as how much you spend. One spouse’s frivolous extravagance may be the other spouse’s necessity. Being unable to set and adhere to a budget creates continual stress on a relationship that can lead to even bigger problems.
- Underspending. Being too thrifty can have its dark side, too. If you love lavishing Christmas gifts on your family and your spouse is a Scrooge, tensions may flare during the holidays and beyond. Again, the key to financial harmony is understanding and respecting each other’s priorities.
- Financial Abuse. In a fiscally healthy relationship, both parties have a say in the budgeting and expenditures, have access to mutually held assets, and money is never used as a threat or incentive to stay in the marriage. When one spouse uses financial means to control the other, it could be part of a pattern of financial abuse.
If you’re thinking about divorce, examining your financial compatibility may provide insight into ways you could reconcile. Seek professional help and mediation through the services of a financial planner. You may also want to explore the roots of your financial beliefs and fears with a trusted therapist.
If divorce is imminent and you’re going through the process of uncoupling, understanding why the relationship didn’t work can be valuable too. Accepting your financial incompatibility may relieve resentments, defuse conflicts, and help you both move on to healthier lives.