How Financial Difficulties Can Lead To Divorce
Although largely downplayed, money is a big issue in most marriages today. Most newly weds fail to realize that switching from a singles to couples lifestyle requires evaluations surrounding monetary and financial behaviors. Financial quarrels are a leading cause of divorces and this has continued to rise in various studies and reports. What many people do not realize is that these financial difficulties could begin before the wedding vows are spoken. In this guide, we will be discussing some of the most prominent problems surrounding finances in most marriages which eventually lead to divorce.
Debt
There are many types of debt individuals take into a marriage with them. School loans, credit cards, and car loans are some of the most common ones. If these debts are expressly discussed before the wedding, it may come as a big shocker to your partner later, especially if they are debt free. Problems start to occur when one partner is debt free while the other is debt laden or one partner has less debt when compared to their spouse. These can quickly cause severe problems when discussions surrounding spending, debt servicing, and income are discussed.
One big area where married individuals in debt are saved is that the debt incurred by one’s partner before marriage stays with them after marriage. Another good thing to note is that your partner’s debt will not affect your credit score rating as it is linked to your individual SSN (Social Security Number) and tracked individually. It is also important to note that some states in the US operate common law which states that any debts incurred after marriage is split between both individuals. Some states share these debts regardless of your account status (Single/Joint) and the nine states in this category are California, Nevada, Idaho, Arizona, Washington, New Mexico, Wisconsin, Louisiana, and Texas.
Debt can be a huge financial issue especially for new couples trying to navigate their way around their new financial disposition. It is important to be open and honest during these discussions by letting your partner know how much you owe. The best way to eliminate any problems that may arise as a result of debt remains debt settlement. You and your spouse should speak to a qualified professional to give you the required advice you need. Debt settlement would allow you and your spouse to start on a clean slate and you would help you to build a better joint debt profile.
Poor Budgeting
Budgeting helps you to plan your income before it arrives so that you can properly and efficiently spend your money. Without a strict budget, you may find yourself and your partner in dire straights if either of you is a big spender. It is always best for the partner who is more responsible with money to lead the way regarding matters of finance. Where possible, discover your money personality and communicate your weaknesses with your partner to build trust.
Budgeting is extra important if you already have kids as their needs could quickly eclipse other important financial obligations. This is another reason why a budget is really important, as it will ensure that you can stay on top of all your financial obligations. School fees, clothing, college tuition, food, and other child related expenses can rack up pretty quickly, hence using a budget would make it many times easier for you to prevent your children’s expenses from overtaking other financial commitments.
Sticking to a budget can be hard, but in the long run, it saves you from a lot of financial mishaps. Always remember to pay your utilities and contribute to your savings before budgeting money for unimportant things. You should also ensure that you stay on top of your bills so that you know what you owe and can structure a payment system that works. Like we discussed above, debt can be a serious problem for married couples. If you want to avoid racking a significant amount of debt, strictly adhering to your budget is the way to go.
Unbalanced Wage Earning Capacity
When one partner earns more money than the other or the other doesn’t earn any money at all, it can lead to problems regarding spending. Most times, the major or sole earner would want to control how this money is spent. Although most couples believe that a joint account is a solution to this issue, it doesn’t do much to address the underlying problem, which is the power imbalance due to the earning potential. In these situations, it is best for you to have an open and honest discussion with your partner about your monetary expectations.
Although some partners prefer their spouse to stay home, they quickly find that a single income may be inadequate to support their current lifestyle. This may breed resentment and lead to quarrels and fights surrounding money or spending. If these issues aren’t well navigated by the couple it could easily lead to a divorce.
One way to solve this issue to have a prior agreement or sharing formula that would determine how each spouse is allowed to spend the money. One partner earning isn’t always ideal because most times they may not earn enough to cover the living costs of the family and this could quickly lead to debt. Another reason why this is inadvisable is because if there is a sudden downturn or negative economic impact you and your spouse may lose your only source of income. It is always best to have multiple sources of income so that you’re better hedged against bad economic situations.
Personality
Personality plays a big role in the money management practices of individuals today. When you get married, although your financial obligations change, your attitude to money does not. If you were a big spender before you got married, you’ll most likely be a big spender after you get married. It is always best that you discuss with your partner about your spending habits. Mismatched spending habits can cause a lot of friction between partners, especially if you have no prior exposure to each other’s spending habits.
Spending habits should decide who does what with the finances. Some people are better at picking investments, while others are better at staying on top of bills. Some people are savers, while others spend money more impulsively. Talking openly between each other makes it easy to know what financial obligations to assign each other. It is also important that you choose financial tasks that you know your spending habits would allow you to fulfill efficiently. Where possible, it is advisable to speak to a qualified professional on the best way to go forward regarding your financial situation.
Conclusion
Money issues would always arise in every marriage, but the significant thing is to deal with them appropriately. Debt, which is the biggest cause of divorce among the financial difficulties listed, can be escaped by debt settlement. You should also remember to be open and honest with your partner about your financial expectations so that you are both on the same page. Never forget to always seek the advice of a qualified professional where possible if you realize you need external help or guidance.
Sources — Become Debt Free
