Finances are one of the biggest issues amongst married couples, often leading to bigger, ongoing concerns or even divorce. But it doesn’t have to be that way.
GOBankingRates spoke with two divorce attorneys, Derek Jacques and Jamie Berger, about the top money-related disagreements that bring couples to their office and how to avoid these pitfalls before seeking their services.
No Savings
“Financial disagreements are among the more common reasons clients hire me as a divorce attorney,” said Derek Jacques, a divorce attorney at The Mitten Law Firm. One of the biggest issues stems from having a lack of savings.
“Most couples don’t save money very well, leading to financial stress and arguments,” said Jacques. “A lack of savings can make it impossible to pay an emergency expense or even the monthly bills. I would advise anyone to set up a savings account and a budget to avoid these arguments.”
Budgeting Issues and Differing Money Values
“One of the top money-related disagreements that I encounter when meeting with a person considering divorce is not having a budget and a misalignment on what is and is not a priority when it comes to spending money in the marriage,” said Jamie Berger, Esq., and the co-founder of Jacobs Berger, LLC, a New Jersey-based matrimonial and family law firm.
According to Berger, it’s particularly common when both parties go into the marriage with significantly different values of money and how they prioritize spending and saving. It also becomes worse when children are involved due to the increased cost of raising a family, or when the couple ends up living beyond their means.
To avoid these issues, it’s important to have frank and open communication early on in the relationship — before getting married. Even if it’s uncomfortable at the beginning, it’ll save a lot of discomfort later.
“Having full transparency on your assets and debts early in the relationship makes it easier for you to build out a plan to start the marriage with solid financial footing and not live above your means,” said Berger. “I also recommend that couples revisit those plans often with a financial professional. As your marriage evolves, your plan may also evolve and waiting a long time to reassess your financial goals with your spouse may result in you being misaligned in your financial goals and how best to attain them.”
Credit Problems
Credit is another big factor in couples considering divorce, especially when someone’s poor credit score keeps them from achieving big goals or dreams — like buying a house.
“Most couples have the dream of buying a home, but if one or both have poor credit, this can become difficult or impossible,” said Jacques. “When it comes to credit, it is important to make sure both spouses are on the same page about paying bills on time and not overextending their credit lines.”
Financial Infidelity
Honesty is key to a healthy, happy marriage. This is just as true of finances as it is of anything else. But when couples commit financial infidelity, it can lead to serious problems or distrust later on.
“[Financial infidelity] is a newer way of describing the common phenomenon of lying to your spouse about spending,” said Jacques. “Whether it is tied to a romantic affair or just hiding expenses, this is a form of dishonesty that will almost certainly lead to divorce.”
“As is to be expected, marital infidelity turns up the emotional dial in most divorces and, when you add in that the spouse having the affair was spending significant money on that relationship, that only fuels the litigation,” said Berger.
While it might be tough, being willing to talk and listen to your partner is vital to ensuring the relationship continues to thrive.
Unequal Responsibilities
When it comes to family finances, it’s easy to get stressed out when one spouse has to handle the bulk of the responsibility and the other doesn’t. More than it being stressful, it can lead to resentment or other issues that can hurt or even disintegrate the relationship.
“Typically, one party may take responsibility in the relationship for handling the finances, which can breed resentment for the party handling the finances if the budget is not being considered,” said Berger.
The person who isn’t in control of the budget might also feel in the dark about their finances or, in some cases, even controlled. This can lead to further resentment, a sense of unfairness, and potentially divorce.
Any of [these] reasons can be avoided by a frank and honest discussion about finances,” said Jacques. “I always tell people that ask to treat their marriage like a business. This means keeping an eye on finances and budgeting. Honest communication will be the way most financial pressures in marriage are alleviated.”
Keeping Hidden Assets
“One of the top issues raised by clients considering divorce is when they perceive that their spouse may be hiding assets,” said Berger. “This comes up a lot in cases where there are closely-held businesses (specifically family businesses) where there can be a level of manipulation or ‘divorce planning’ if one spouse primarily operates the business.”
Berger suggested getting a prenup to avoid this — and similar — money issues.
“At the end of the day, having a prenup agreement allows a couple to agree on certain terms if they divorce down the line, which allows for certainty that does not exist without a prenup,” said Berger. “It also allows for those difficult conversations to take place before the marriage so when difficult topics arise during the marriage (which they will) you know you and your spouse have built a foundation for productive communication.”
Planning Doesn’t Mean You’re Considering Divorce
You might not want to have all of these tough conversations or plan out the “what ifs,” but doing so can save you and your spouse a lot of heartache and trouble later on.
“It is also important for people to remember, planning for the ‘if’ does not make it any more likely that your marriage will fail,” said Berger. “In my experience as a divorce attorney, I think it is the opposite. Having these conversations actually provides you and your spouse with a certain peace of mind that you have thought through how you will address issues in your divorce (should it come to be) before you get married.”
Have Regular Conversations
“You and your spouse should sit together once a quarter and discuss the financial circumstances, budget, and any upcoming extraordinary expenses that may occur in the following months,” said Berger. “This allows for open communication and transparency and is especially important to avoid one spouse feeling kept in the dark about finances or the other spouse feeling that a spouse does not want to talk about the family finances.”
These meetings are what Berger calls “state of the family” meetings. They’re not just limited to finances either. They’re a great opportunity for both spouses to discuss any other important issues in their household or relationship and work toward resolving them.
“I suggest that, if possible, these conversations take place outside the home with limited distractions so you and your spouse can focus on what matters most to your family,” she added.
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