Can Money Issues Ruin a Relationship?

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Living with someone, whether you are married or not, requires unwavering trust and transparency. And money problems can crop up in almost any relationship. But can money issues ruin a relationship?

Financial troubles can devastate any committed relationship, regardless of how long you’ve been together. Arguments and anger can arise when spouses disagree about spending and saving practices. And financial infidelity can be almost as bad as sexual infidelity.

But that’s not all there is to know about relationships and money.

So in this article, we’ll look at couples’ finances, both married and not. And we’ll explore the best practices to follow no matter what the income level. That way, you can steer clear of what can be the worst problems couples face.

Just keep reading to find out!

You CAN change how you and your spouse communicate about money before it completely derails your marriage.

I’ve been in your shoes. You want to move beyond the feeling of being not seen as an equal and not feeling respected. And you desperately want your marriage to have trust, mutual acceptance, and to feel like you are both on the same team.

Ultimately, this isn’t a money problem; it’s a marriage problem.

Luckily, all hope is NOT lost, and there is something you can do, even if your spouse isn’t willing to talk about or work on the problem.

The website Regain by BetterHelp offers licensed therapists who specialize in couples counseling and will work directly with you and your spouse online; anytime and from anywhere.

This quote from Brenda R. perfectly sums up the quality work Regain does:

“I was apprehensive about having a male couple’s counselor at first, but he has been amazing. We were close to ending our relationship but over time we’ve worked on our foundation and also expanding our communication. We would not be together if it weren’t for the direction from Tom (and the work we’ve done as well).”

Serious about saving or improving your relationship?

CLICK HERE to answer a short quiz and see if Regain is right for you.

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How do money problems affect relationships?

How each spouse spends money has an impact on every area of their lives, from whether they’ll be able to afford to have children to what kind of home they’ll be able to buy and how comfortable they’ll be in retirement.

It’s not just about romantic gestures when it comes to building a relationship and sharing a life.

When you’re in a committed relationship, you develop a financial partnership as well.

There are several money problems that can have adverse impacts on your relationship. Being secretive when it comes to finances is a big one.

When both spouses work and can’t agree on financial matters or find the time to discuss them, they may decide to split the expenses or assign them in some other fair and equitable manner.

After the debts have been paid, each spouse is free to spend the remaining funds as they see fit.

Although it appears to be a logical idea, it divides spending power, removing most of the financial benefit of marriage, as well as the opportunity to plan for long-term goals like homeownership or retirement.

It can also rise to destructive behaviors such as financial infidelity, in which one partner hides money from the other.

Sharing bank accounts can curb financial infidelity.

But it can also make sure you are both on the same financial page when it comes to paying the bills, paying down debt, and saving for the future.

To read more about why you should share a bank account with your partner, read this recent article. I got into not only why it works but what your odds are if you DON’T combine them.

Just click the link to read it on my site.

What percentage of relationships fail because of money?

33% (660,000) of marriages fail every year in the United States due to some sort of financial issues, including not being able to pay bills, financial infidelity, and simply not being able to live the lifestyle one or both parties wished to be able to.

(source)

Many marriages are hampered by financial disagreements. It’s no surprise that financial issues are a top cause of divorce when over a third of individuals with partners say money is a major source of tension in their relationships.

According to a recent survey by the Institute for Divorce Financial Analysts (IDFA), money concerns are the third most common reason for divorce in the United States, after incompatibility and adultery.

It’s worth noting that the study inquired about the “principal cause of divorce,” so money considerations could have played a role in other divorces without being the primary cause.

In fact, according to this study published in the Family Relations journal, arguing early on about money may be the number 1 predictor of whether or not you’ll get divorced in the future.

The authors concluded that “Financial disagreements did predict divorce more strongly than other common problem areas like disagreements over household tasks or spending time together.”

So it shouldn’t come as a surprise that divorce rates are high for couples that have disagreements about money.

Budgeting is a good way to stay on top of finances. You can easily see how much money you have coming in and going out. You can see where you need to cut spending and find ways to grow your savings.

There are several budgeting apps out there that are great for couples to stay on the same page.

In this recent article, I talk about the best budgeting apps for couples. Luckily there are several great ones available, and almost all of them are free or at least have a free option. But 1 is clearly better than all the rest.

Just click the link to read about them on my site.

Is marrying someone with no money a bad idea?

Marrying someone with no money is not likely to lead to a successful marriage. But if they at least have a plan to earn a higher income in the near future, that can lead to success. But bad habits and no plan for the future are likely to mean their financial situation is unlikely to improve.

Not having money is a molehill that can be overcome. Being bad with money is a mountain.

First, ask yourself who makes the most money in the relationship. If you’re asking if it’s a bad idea to marry someone with no money, I’m going to assume you are the breadwinner in this scenario. And that’s okay.

Next, consider who spends the most money and on what.

When it comes to money, you need to be on the same page. Is your partner already in a lot of debt as a result of their excessive spending? Do they make purchases that you would consider frivolous?

Differences in spending, like all money issues, don’t have to spell the end of the relationship; nonetheless, you must be conscious of them and fully accept them, or they will just cause problems.

Finally, what are your long-term goals? Do your financial goals and those of your partner line up? Do you want to live simply in a cottage while they yearn for annual visits to the south of France?

Do you prefer expensive cars, while they think a Honda is a better choice?

All of these are things to think about when getting ready to marry. If your partner has no money but has the same financial goals and attitude towards money, they can earn money and learn how to be good with finances.

On the other hand, if your partner is bad with money, and your attitudes concerning finances are on opposite ends of the spectrum, that is a greater hurdle to get over.

If your marriage is failing, then check out this quick video on the 7 Steps to Fixing Your Marriage that will help get yours back on track.

Can you legally separate finances in a marriage?

You can have separate bank and credit cards in a marriage, but legally everything acquired after the marriage will be considered joint assets and debts. So having separate bank accounts won’t protect your money if you get divorced or one files for bankruptcy.

Some financial experts agree that having different bank accounts or a “yours, mine, and ours” approach is the best way to manage money in a marriage.

But the benefit of this type of system is mostly psychological rather than legal.

And personally, I think everything should become “ours” once you say “I do”. After all, you didn’t agree to share your life with this person some of the time or only under certain circumstances.

If you live in a community property state, everything you earn throughout your marriage — including the money you put into those separate accounts — is considered “community property” and belongs to both spouses.

Most states operate under equitable distribution laws. Generally, this means that property acquired during the marriage belongs to the spouse that earned it.

While this sounds easy, a good attorney will be able to argue that any assets obtained by either spouse during the marriage should be regarded as “marital property” and divided.

Any assets are usually split fairly, although not always evenly.

A judge may also decide to use one spouse’s separate property to support a settlement that is equitable to both spouses.

So while it is perfectly legal to have separate finances in a marriage, it’s not as beneficial as one might think.

How do I protect myself financially from my spouse?

Protect yourself financially from your spouse by having a separate bank account and using a credit monitoring system to alert you to new accounts created in your name or changes to your credit report.

Of course, if you feel you need to protect yourself financially from your spouse, you have a marriage problem, not a money problem.

But if you aren’t married yet, the easiest and best way to protect yourself is to get a prenuptial agreement.

According to a survey by the American Academy of Matrimonial Lawyers, over two-thirds of lawyers have witnessed an increase in the total amount of people obtaining prenups in recent years.

Lawyers claim that millennials, in particular, are increasingly using them.

Having a prenup forces couples to talk about finances. There’s a lot to be said about having conversations about finances before tying the knot. Talk about goals and plans and managing money. You can always modify or even nullify the prenup later on down the road.

Always keep inheritance completely separate. Inheritances are typically not considered marital property, and if it is comingled, it will be hard to reclaim in the event of a divorce.

If you are simply concerned about your partner’s spending habits, talk to them about budgeting.

Having a budget is a great way to see exactly what you have coming in and going out. But it should definitely be done together.

If you feel like your spouse is the reason you are headed down a bad path, don’t blame or hurl accusations. Instead, be united in your financial goals and choices. You may find that you just have different ideas when it comes to long-term goals.

In order to find the same footing, you must be in communication and agreement.

Make a budget, discuss expenses, and check-in with one another until it becomes a habit. To read more about budgeting and getting your spouse to stick to a budget, check out this recent article. I got into exactly what to do if your spouse is out of control, AND how to do it without a fight!

Just click the link to read it on my site.

Should I manage finances separately if I’m not married?

Do not combine finances or assets until you are married. After all, if a married couple divorces, the courts determine how the assets and debts get divided. Unmarried couples have no protection and will be at each other’s mercy.

So yea, co-sign that lease together on an apartment. But don’t do much beyond that.

This doesn’t have anything to do with trust or love. Things happen, and relationships break up all the time. Sometimes even on the day of the wedding.

With a girlfriend, boyfriend or fiancé, there is no judge or decree saying what is fair when it comes to splitting up finances and assets. There are no laws or guidelines specifying what needs to happen.

For example, if you purchase a house with a partner before you get married, and that partner leaves – then what? You get stuck with a house that you may not want to live in anymore and the mortgage that comes with it.

You suddenly went from having two incomes to pay the bills to one. 

You won’t be able to do anything with the house, either. You won’t be able to sell it, refinance it, or remodel it without the consent of the other mortgage holder. It will be a giant mess.

But if you had been married, a judge could have ordered that the house be sold and the money split. Or they could order that one partner must buy out the other partner.

But until you are married, it is always a good idea to talk about money. Talk about debt, income, bills, and future plans.

But it is in both of your best interests to keep all of your money and debt separate until you officially say “I do.” Don’t get any joint accounts, co-sign loans, or make large purchases together until then.

Is it better to keep finances separate when married?

Married couples stand a much better chance of staying married when they combine finances. Marriage is, after all, a union of not only two people but their assets as well.

For marriage to succeed, both partners must view it as a joining; a true union. For better or worse, both partners must go all-in.

While you may think that keeping finances separate will ease financial tension in a relationship, that line of thinking isn’t necessarily true.

When you manage your money on your own, it may be more difficult to achieve certain goals.

Let’s imagine one of the partners wants to buy a property, but the other doesn’t have enough money for a down payment. This will likely result in an argument. Talking about upcoming purchases and planning for a common goal will result in fewer arguments and a stronger marriage.

Younger couples tend to argue more about money. They are also less likely to combine income and share expenses.

Money fights and money problems are often at the top of the list when it comes to reasons for divorce. Combining finances is one of the best ways to minimize that.

There are also tax benefits to having joint bank accounts.

Couples who file taxes separately might end up paying more taxes than those who file jointly. Filing jointly will typically get you more tax deductions and credits.

Final thoughts

Money issues can absolutely ruin a relationship. They are in the top three reasons that people get divorced. And money issues don’t always end if you get divorced. Sometimes a wife can try and claim their husband’s retirement dollars years after the divorce!

It’s important to get on the same financial page as your partner. Be open and transparent about income, debts, spending, and future goals before you tie the knot.

You’ll find that talking about finances early on can be an indicator of compatibility in the long run.

You CAN change how you and your spouse communicate about money before it completely derails your marriage.

I’ve been in your shoes. You want to move beyond the feeling of being not seen as an equal and not feeling respected. And you desperately want your marriage to have trust, mutual acceptance, and to feel like you are both on the same team.

Ultimately, this isn’t a money problem; it’s a marriage problem.

Luckily, all hope is NOT lost, and there is something you can do, even if your spouse isn’t willing to talk about or work on the problem.

The website Regain by BetterHelp offers licensed therapists who specialize in couples counseling and will work directly with you and your spouse online; anytime and from anywhere.

This quote from Brenda R. perfectly sums up the quality work Regain does:

“I was apprehensive about having a male couple’s counselor at first, but he has been amazing. We were close to ending our relationship but over time we’ve worked on our foundation and also expanding our communication. We would not be together if it weren’t for the direction from Tom (and the work we’ve done as well).”

Serious about saving or improving your relationship?

CLICK HERE to answer a short quiz and see if Regain is right for you.

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