There’s a wedding tradition in Arab culture whereby the groom provides the house and the bride pays for the furniture. It’s a clear-cut division of financial responsibility – and a blessing in hindsight – because money, to every married couple’s chagrin, is the most common fight in wedded bliss.
More and more couples are choosing to get married later in life, thereby entering the union as independent individuals with their own assets and savings and lifestyle preferences.
However, it wasn’t always the case. A few decades ago, men were the breadwinners and women raised children and that was that. Fast forward to today, and finances in marriage have become a very grey area. That’s in part because more and more couples are choosing to get married later in life, thereby entering the union as independent individuals with their own assets and savings and lifestyle preferences. Suddenly, you’ve got an anxiety-inducing mix of assets, cash flow, and dissimilar spending habits between the two of you. And you have no idea what to do with all of that.
Do you lump all of your money and assets together? Do you maintain separate bank accounts but open a joint one? And what happens when a partner has a baby or goes on sabbatical and no longer has an income? In such circumstances, does the spouse supporting the family feel entitled to call all the money shots in the marriage? Oh, and what about the couple’s attitude on spending in general? What if you’re a big spender while your partner is a spendthrift? Or one prioritizes saving and the other just wants to enjoy the money now?
These are all questions that most of us don’t ask pre-marriage. After all, the subject of money is considered unromantic, gauche, even personal. We were raised to believe that it’s impolite to talk about money. And so, when we fall in love and start having serious conversations with our future life partners, we actively avoid talking about the subject.
But talking about money isn’t just talking about money. Essentially, we are discussing how we want to live, what our values and commitment to each other and our families are, and our plans for retirement. A conversation about money is probably the most important conversation to have pre-marriage – right after the talk about kids and the one about religion.
“It is always advisable to ensure that a couple thinks along the same lines regarding their financial priorities, as marriage is clearly a lifetime commitment, and arguments and disagreements around money are well documented as being a major cause of divorce,” says Adrian Cartwright, a Dubai-based Senior Wealth Advisor at deVere Acuma, one of the world’s leading independent financial advisory organizations.
In fact, 22 percent of marriages end in divorce because of money issues, according to the Institute for Divorce Financial Analysis. It’s the third leading cause of divorce in the US, just behind infidelity.
This isn’t all that surprising, says bestselling author and financial consultant David Bach in his book ‘Smart Couples Finish Rich.’ Just consider the basic facts:
- How you spend money has nothing to do with how much you love each other.
- The two of you were probably raised differently when it came to money.
- The two of you probably value money differently.
- The two of you probably spend money differently.
It’s no wonder money is the biggest source of conflict in the majority of marriages. However, there is still good news for those who have already taken the plunge into matrimony and are now struggling to figure out a way to talk about money without it always turning into a fight.
“When we make a priority of discussing our finances and planning our financial goals and dreams together, it changes everything. It focuses the energy of a relationship on the positive instead of the fights.” Bach says the best way to do this is to start by approaching the subject from a value perspective. What are your values in life as individuals? Write those down then compare lists. The next step is to figure out what your values are as a couple.
When we make a priority of discussing our finances and planning our financial goals and dreams together, it changes everything.
Cartwright concurs. “Values and lifestyle are key. For example, do you both want to retire in the sun, or near the sea, or travel, or, indeed, work beyond retirement? Couples in cross-cultural marriages or with just different upbringings may have different values and beliefs. Another example which we see often is that of couples where one spouse considers it their moral duty to support their parents, siblings, or wider family either financially or physically, while the other spouse doesn’t.” To avoid these surprises, Cartwright stresses the importance of clarifying our long-term financial goals, values, and life plans with each other as early on as possible to avoid them turning into bigger issues later on.
Once you have ironed out what you stand for as a couple, you can then look at the way you’re individually spending and see if it aligns with your values. From there, create a budget that factors in everything you have agreed to spend on.
“I always advise people to do the very basic: budget! Work out what you earn and what you spend and be honest about it. Include holidays, travel, entertainment, and hobbies. There is no point in hiding the fact that one of you spends “x” amount on golf, yoga, or the gym as it could cause a problem later on if the other party thought that extra cash could be saved towards something else, such as a deposit on your first home or another financial goal,” says Cartwright.
“That being said, I also believe that there has to be a balance,” he adds. “I often use the gym or fitness as a comparison – if your goal is to run a marathon in 12 months and right now you struggle over five kilometers, then attempting a marathon on day one of your training program is going to result in injury, blisters, failure, and more importantly than anything it will discourage you from running again. Saving is the same. If you bite off more than you can chew at the start, then there is a large risk that you will resent it and stop. By choosing a comfortable yet serious amount to save, the big spender will see the benefit and not feel choked whilst the big saver gets to save but also gets to enjoy spending money with their spouse.”
The takeaway is prioritizing and compromising. Agree on the principle categories you want to invest in, and leave a little cushioning for the frivolous spending. By focusing your energy on making financial decisions that accommodate each other’s wants and needs, you prevent money from destroying your relationship.