29 Oct Money talks
Money makes the world go round, but a good conversation about finances is passionately avoided by most loved ones and labelled as absolutely not romantic. This while being well informed about your husband’s financial situation significantly increases the chance of a successful marriage. The fact that you can literally get grey hair from financial problems and that they are an important source of marital problems and thus of a divorce, will not surprise most people.
But the fact that there is a correlation between the likelihood of you staying together and how well aware you are of your husband’s financial profile before marriage is something that is a lot less known and that the average person does not think about. By financial profile, I mean on the one hand the assets and debts of the partner and on the other hand how the partner deals with finances (paying bills on time, creditworthiness) and what his or her emotional and symbolic relationship is to money (generous or grumpy, fearful or trusting, afraid that there is not enough, trust that there will be enough, deriving status from it, feeling that you have not earned it, sloppy or excessive punctuality with money, what money stands for with the partner and what goals or dreams the partner wants to achieve with it).
A national survey in the United States found that 26% more of married couples than divorced couples had known what the income of their future spouse was. 36% more married couples had known about the student debt of their future spouse. And 30% more knew about their spouse’s payment history. Of the divorced couples, only 28% knew about the long-term financial goals of their former partner, while that was 60% for the couples who were still together. A significant difference. An important difference when you consider that money has a great symbolic value and stands for dreams, security, and success.
This research also revealed that just talking about money is not enough. The quality of the communication is more important than the frequency with which money is discussed. Many people forget that how you think about money and deal with it is an important part of your lifestyle and that this plays a major role in your financial compatibility as partners. 53% of the divorced couples stated that this had not been the case for them and that they had in fact been surprised by the poor creditworthiness of their partner, that he or she spent too much and did not pay bills. For example, it was not until the divorce that many found out that their future ex had a huge student debt (and these are quite substantial in the US). Although financial stress proved to be an important reason for the divorce, the divorce usually did not end the financial problems, and they only increased after the divorce. Often, the debts incurred by the ex before or during the marriage still have to be paid off for years, and especially women whose husband was the only breadwinner were less in good shape after the divorce. In addition, there were the costs of the divorce. The costs of fighting out the divorce in court were the highest. In short, whether you are financially compatible is therefore one of the most important pillars of a happy marriage. This also means that by engaging constructively with each other early in the relationship about money matters and knowing how you both feel about it and handle it, you can influence the success of your relationship and ensure that you do not blindly walk into the marriage with the beautiful idea of a white picket fence (without good marital conditions) with someone who will not get a mortgage due to his credit record. I always say, projection is not a connection.
However, many people find talking about money very confrontational and because “money” stands for so much and the subject is often so anchored in how you were raised, it is also quite challenging for many people to change how they deal with/relate to money. This, combined with the persistent image that talking about money would not be romantic, makes many people prefer to avoid a good conversation about it. Or only talk about it when there’s a fight about it. Talking about money is very intimate and can be very fun. After all, you will learn a lot about your loved one by asking questions about this. What are his or her dreams? What are the concerns? How was it handled at home in the past? Does that play a role now? What long-term goals do you want to achieve?
Of course, people often do not know exactly what the legal and fiscal situation is. Many people could use some help in understanding their own finances and those of their partner and in setting long-term goals. A conversation can go a lot more smoothly if you are guided by a professional coach. What do actually you want? And me? Do we
really understand each other? Have we thought carefully about everything? Do you really want to enter into a joint financial future, but have you learned from your parents that the family assets may not be shared with your future partner?
The VvCP is mainly known for Collaborative Divorce. However, the aim of the association is not only to resolve conflicts with the method of collaborative practice but also to prevent them. The method can also be used very well to hold a pleasant and well-informed consultation together and, where necessary, to record agreements in all phases of the relationship. Not only when entering into a marriage, but also when children come along and when one person stops working, resulting in a loss of income and more dependence. For many people, living with your loved one and building a family is a great dream. For the biggest day of your life, people are willing to go big. At the important moments in your life, starting a conversation with good guidance and being challenged to think and discuss just a little deeper is just as important an investment. Perhaps even more important when you consider the results of the research cited in this blog.