One of the very first arguments and perhaps hottest I had with my wife when we got married a few years ago was about money. At the time, I didn’t think it was a big deal. Afterall I had, in my experience as a financial planner, seen couples disagreed intensely over their financial future. However, when I looked at statistics about divorce and so called ‘irreconcilable differences,’ I realised this is one of the weakest links in marriages and relationships.
The old English adage rings true: ‘Love flies out the window when poverty comes through the door.’ Over 7 in 10 couples say that money is the most difficult subject to talk about and 3 in 10 lie to their partner about their credit card spending, according to The Centre for Social Justice, a UK based independent think tank.
So here goes, 5 top reason couples fight over money and how to deal them
I am not a marriage expert but I know that keeping secrets in marriage is rarely a good thing, although many of us tend to rationalise this on the basis that we are ‘protecting‘ our spouse. But when it comes to the skeletons in your financial cupboard; your mounting credit card debts, savings stacked away for the rainy day, your damaged credit report, you are better off with full disclosure!
Whether you like it or not, keeping money secrets WILL come back to bite you in the bum. I remember a couple whose mortgage application was declined because one of them- the husband- had bad credit. The wife felt very disappointed and betrayed, not because they didn’t get the mortgage but because, in all their discussions about getting a mortgage, he failed to mention that there may be a problem somewhere.
SOLUTION: Welcome to Full Disclosure Lane! It is not a popular street these days but being completely honest with your spouse about your finances can strengthen your relationship. Initially, your spouse may feel disappointed and even betrayed that you have kept a secret from them but by patiently explaining to them why and how this has happened, you can agree to move forward with a more open and honest approach in your finances. If the secret is so big and you don’t know how to tell, consider speaking to a financial coach.
Borrowing money from a family member is always fraught with tensions and when in-laws are involved, the stakes are doubled. To paraphrase US-based money expert Dave Ramsey; family Christmas dinner taste different when you are in debt to other family members at the table.
Borrowing money from family places a huge strain, not only on your relationship with the ‘creditor’ but also between you as a couple. While one of you might feel that there is no big deal, the other might feel guilty about taking a vacation instead of paying back the money you owe.
SOLUTION: This is simple; avoiding borrowing money from family members, especially your in-laws! If there are debt you currently owe your family members, have a discussion about how you are going to pay back and communicate that to the people involved and MOST importantly, keep to your promise.
So you want to pay down your debts but your spouse wants yet another pair of shoes or you are thinking about buying a new car but your partner thinks you should pay down the mortgage.
SOLUTION: This isn’t really about money as such, it’s about having a plan that both of you can identify with. Having a financial plan for your family is the secret. We explain how to do this in Creating Your Personal Financial Plan
It is not unusual to get financial requests from family members; aging parents, siblings who are studying or even working can ask you for help but when you don’t have a laid-down understanding on how to deal with this, it may cause strain on your relationship.
It may be because family members from one spouse tend to ask for money a lot more frequently than the other and hence you tend to give more money to them. Or as a participants in one of our events told me, your in-law may put pressure on one of you, suggesting that you are not giving them enough money and implying that your spouse is the reason.
SOLUTION: Agree between you two how much you want to set aside each for family members and how this will be administered. Would you give based on your perception of need or will you rotate between them; i.e. if you give to Mrs’s side this month, you give to the other side next month, which means if a request comes in from a family, they will have to wait for their turn.
You may also need to set ground rules and decide when you won’t help! Yes, there are request that you won’t or can’t attend to. Decide in advance how you will handle this.
Whether you like it or not, there is ample research-based evidence that men and women think differently about money. Add to this other gender based issues such as pay gaps, you ignore these differences at your own peril.
Although, it is a bit of generalisation to say that women are spenders and men are savers or that men earn more money than women, money-related gender differences are alive and real.
Ruth Hayden, a financial counsellor and author of “For Richer, Not Poorer: The Money Book for Couples’ observes that “Women have been taught to invest in lifestyle and children. Men have been taught to invest in things — a house, retirement fund etc. The way that translates into spending is that women spend more money on the stuff that makes the day work. The problem with that is, most of that stuff has no asset value, no visible value.”
Also men generally earn vastly more money than women, even on the same type of job: In 2011, average full time income for men is £28,091 compared to £22,490 – a difference of 19.9%! (National Office Statistics). Now this may not be true for some couples and that in itself can cause problems, if the wife earns more than the husband.
In addition, some women by default hand over financial matters to their husband only to find out he wasn’t doing such a great job with their finances.
I can’t count how many times women have told me ‘oh, my husband deals with all the financial things’ or ‘I have only recently found out that we had £XX,000 credit card debt that I didn’t know about.’ It is a way down the slippery slope.
SOLUTION: Both of you have to be involved and engaged with financial matters, from drawing up your monthly budget to deciding what type of mortgage you sign up for. You both need to sit down periodically and review your overall finance; pensions, investment, everything! Now, one of you might be better than the other people at finances, but both of you have to understand and agree what actions you are taking. Read (Re)Uniting with Your Spouse on Money to find out more.
Also check out our MatriMoney Program. People who enjoy harmony in their relationship are people who understand and respect individual differences in the way they think and act about money.