Money and Relationships/Debt and Divorce
Relationships are challenging enough without financial worries. Read on for a few suggestions on avoiding money struggles with your significant other.
Handle It Together
Since relationships encompass two people, both partners should be involved in determining what to spend, what to save, how to budget, how to deal with debt, and other issues related to finance. The Equality in Marriage Institute counsels couples to use teamwork in managing their money, regardless of how much each person earns. The Institute suggests figuring out an overall financial strategy – including a bookkeeping plan – as well as establishing a clear roadmap for meeting future fiscal goals.
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Vive La Difference
Gender differences extend themselves to spending habits. According to Psychology Today, those differences often cast men as the hunters and women as the gatherers in the relationship. The magazine cites Rob Becker’s theater piece “Defending the Caveman,” which portrays men as more likely to go buy a piece of clothing, wear it until it’s totally unusable, and then go out and hunt down a replacement. In contrast, Becker portrays women as tending to gather by shopping and storing for future needs.
Additionally, Psychology Today claims that issues of boundaries, hierarchy, and competition play into sex differences when it comes to money. While men must establish more rigid boundaries from their mothers – who have a large part in raising them – women don’t have such a strong need to do so since those boundaries are based on the gender difference between mother and child. In addition, the male perspective of the world as hierarchical and competitive differs from a cooperative female perspective, according to the magazine.
This causes money struggles. With their more rigid boundaries and sense of competition, men are more likely to act independently and make financial decisions on their own, while women seek to act jointly. The Financial Services Authority of the United Kingdom suggests directness and honesty when discussing money matters. Avoid accusatory speech and keep the conversation factual, and you’ll find your communication more productive.
Money Issues Can Lead to Divorce
When communication around finance goes sour, a couple struggling over money can end up in divorce court. According to MSN Money, 70 percent of married couples reported money problems in a study of a married couples from 1980 to 1992. However, MSN Money cites professor Jan Andersen’s assertion that only 5 percent of divorces themselves are incurred by financial issues.
Good financial practices from the very beginning of a marriage can help couples avoid such strife. With the average wedding costing more than $26,000, many married couples enter their life together already in debt. Keep your nuptial costs reasonable and you’ll be ahead of the pack. Be candid with each other about present debt – no secrets about how much either of you owe are allowed. The White Robed Monks of St. Benedict also offer this advice: Draw up a monthly budget and stick to it. Figure out how much money you have, where it’s coming in, and where it’s going out, then decide where you can save money.
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To Merge or Not to Merge?
It’s up to you whether to maintain separate checking accounts or to establish a joint account, but you don’t necessarily need to choose between the two. Many couples set up a joint account for household expenses, while still keeping their own separate accounts for individual spending. This approach maintains a teamwork perspective while allowing each partner to keep financial freedom of his or her own.
There’s also the option to combine all your money in one account. However, if one partners is deeply in debt or notoriously poor at maintaining accounts, this may not be a good idea.
Since marital assets can be pursued by creditors and judgment owners, you should be aware of the need to protect yourself from your partner’s debt. Establishing a special form of joint property ownership called tenancy by the entirety creates an invisible martial ownership in which one spouse’s debts cannot be held against the other spouse. As with other financial matters, it’s crucial to be candid when discussing previous debt with your significant other.
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