The old adage may be true when it comes to children, but it is definitely not true when it comes to married couples discussing their finances. Even if you keep all of your money completely separate, both sides of the relationship need to have an understanding of their partner’s financial health. If your spouse runs into money problems it will place serious stress on your relationship and is one of the leading causes of marital breakdown.
Our firm recently hired Harris Decima to conduct a survey that focused on debt management and relationships. A White Paper setting out all of the survey results, and a short video, may be found on our website, but I have listed a few key findings that relate specifically to communication, or the lack thereof here:
1) More than 1 in 3 of all respondents said they did not discuss finances with their partner before entering into a permanent relationship (marriage or common-law household);
2) The people that didn’t discuss their finances also started off with 20% more debt; and
3) They were twice as likely to increase their total debt after getting married.
The most troubling result, from my perspective, was the fact that fully 15% of the respondents said they had no idea whatsoever regarding their partner’s financial situation, before or after getting married.
I appreciate that discussing money is never easy – particularly if you are concerned that your financial situation might scare your partner away, but money problems don’t solve themselves. Eventually, debt problems come to light – a collector calls the house and leaves a message on your answering machine, or a past due notice arrives in the mail. Worst still, some sort of legal action is commenced against you. If you’ve tried to hide your debts you’ve got to realize that eventually you will be found out. That can have huge implications for your marriage. It could bring into question your trustworthiness, “if you are willing to hide this then what else aren’t you telling me?” It is not a pretty picture.
The survey also found that those people that discussed their financial situation before committing to a permanent relationship were more likely to reduce or pay off their pre-marriage debt. These people were also 50% less likely to increase their debt after marriage. Talking about debt together is a big influencer in making sure your debts stay under control.
Whether or not you decide to discuss your finances with your spouse is entirely up to you. The survey reports on what has happened to other people – it may not be what will happen in your relationship.
On the other hand, we are talking about two of the most important aspects of your life – marriage and money. If you are going to enter into a committed relationship then we strongly suggest you add finances to the list of things new couples talk about: health, kids, where to live, plans for the future, money (personally, we put money at the top of the list).