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Money and Marriage: Honey I Hardly Know You

Forty-three percent of 1000 marriage partners surveyed this month by Fidelity Investments did not know how much their partner earns. 10% were off by $25,000 or more.  Ignorance is getting worse; the 2015 survey found that a mere 27% couldn’t answer that question correctly.

73% of those couples reported that they communicate very well or exceptionally well about finances. Makes you wonder what the remaining 27% of couples think.

36% of couples disagreed on the amount of their  current investible assets..  Sad to say, that disagreement is highest in the group closest to retirement: Baby Boomers, born 1946-64.

In fall 2014 I published a series of blog pieces on Money Matters in Couple Relationships: How to Avoid Getting Taken to the Cleaners, the Poorhouse, or Worse–to Jail.  These posts warned  unsuspecting lovers against marrying without awareness of the other’s financial history.  Now we need an updated warning: once married, you need to be vigilant about the financial status of your partner.

Too many sadder but wiser folks learn this information during divorce discovery.  Everything you own in most states is joint martial property.  But hear this: so are all debts.  If your spouse runs up thousands on the credit card, you own 50% of that debt.  Worse, if the credit company can’t collect from the spouse ( who may be unemployed, disappeared, broke, diseased), you’ll be hounded for 100%.

How many of you sign the tax return prepared by your spouse (and maybe the accountant) without looking at even page 1?  That page tells the yearly income, which is then broken down into separate pieces on the subsequent pages.    If your partner hides income from the IRS, and if you know or even suspect, the government wants to talk to you, the not-so-innocent spouse.

If the gross income on your return seems too high for what you get to spend, ask where the money is going?  If it’s too low, you need a different conversation. Perhaps undeclared income, as in the prior paragraph. Perhaps your spouse’s financial picture has changed without your knowing. Does the following (real but disguised) situation ring a bell?  After early financial promise, during which the husband bought a Jaguar and a large home, he failed to make money at his job.  He also failed to tell his wife, disguising matters by going to the job site each day, even thought he earned almost no income. She, in denial of her own, continued to spend money and did not return to work.

Even without fraud or dishonesty, failure to communicate about your income and financial goals can make matters worse as time goes by.  Eventually you retire. A couple’s retirement years might last a very long time.  1 in 3 couples (survey says) disagrees about its expected lifestyle during the “golden years.”  47% failed to agree about the amount they need for that eventuality. What would happen if one spouse dream of Asian vacations, while the other thinks downsizing in a Tennessee retirement community is prudent? What about different view of how much to leave the children–spend your capital in older age or save for your heirs?

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On the emotional page of the relationship, sharing information about earnings, debts, financial fears and hopes is part of marital intimacy. You don’t have to experience any of the troubles in the above paragraphs to benefit from that discussion.  Just like sharing interests and successes or frustrations, talking about money is another way of knowing your spouse. Some couples finally achieve intimacy in the money realm only when one is dying or disabled; together they plan for a drastically altered future.

Don’t wait until scary circumstances force shared reality upon you.  Share your current money and future expectations now. Plan and dream together, but also share anxieties.  Like all problems, hiding makes things worse, not better, as your teenager learns when she intercepts her advisory grade report from the mailbox before the folks get home. Your spouse may or may not be your best friend, but in terms of finances, you’re closer to that person than to anyone else. In money matters, a marital couple is like one person.

 

 

 

 

 

2 Responses to Money and Marriage: Honey I Hardly Know You

  1. billgncs July 7, 2015 at 12:26 pm #

    it’s a powerful secret for one spouse to keep from the other – hidden expenditures can enable many behaviors that threaten a marriage.

    if one spouse has complete control, that’s a very dangerous imbalance.

    • Dr. Candida Abrahamson, Ph.D. July 20, 2015 at 9:03 am #

      One spouse controlling the money should never happen. A simple solution is 3 checkbooks–the largest one for joint expenditures. The partners agree upon an amount each is entitled to spend no questions asked, so each person has a smaller personal account. Agreement on the amounts and the purposes for those accounts might require a counseling session or two, but it’s better to work these matters out up front than to argue after the money has been spent.

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