We all know that debt can be a big stressor in our lives – whether we’re married or single. But financial issues can play a huge part in why couples divorce. We even wrote about it in a recent blog. However, this doesn’t mean that if you or your spouse brought debt into the relationship that your marriage is doomed. What matters is how you handle it.
A recent study from Fidelity Investments uncovered some interesting connections – or, actually, disconnections – between married couples and knowledge of each other’s financial information. These disconnects and misunderstandings can lead to financial stress and relationship challenges, which in turn can lead to separation and divorce.
Financial knowledge gaps
According to the study, more than half the couples surveyed brought debt into the relationship. Out of those couples, four out of 10 admitted that the debt had a negative impact on the relationship or marriage. The study also uncovered many more financial disconnects among couples:
- For the couples that brought debt into the relationship, 49% disagreed on whose responsibility it was to pay off the debt.
- However, 55% felt more responsible for paying off their own debt as opposed to the 33% who expected their partner to pay off theirs.
- More than four in 10 disagreed on what age they plan to retire, and 54% disagreed on how much they should have saved by retirement.
- About three in 10 couples differ on whether or not they’ve provided passwords to investment, bank, email, and social media accounts to their partners. One in five disagree on where important papers are located.
Work on the debt, work on the relationship
Fidelity’s study showed some real value to working on debt together as a couple. The couples in the survey that reported debt as one of their biggest issues also reported higher rates of the following (as opposed to couples who aren’t stressed about debt):
- Arguments about money
- Difficulties with budget conversations
- Difficulties with money conversations overall
- Difficulties talking about savings and investments for the future
Fidelity asked the couples their best financial tips for newlyweds. The top answers? “Save as early as possible for retirement.” “Don’t take on more debt than you can possibly afford.” “Make all financial decisions together.”
Alexandra Taussig, senior vice president of lifetime client engagement at Fidelity, explains, “We see over and over that dealing with debt is one of the biggest stressors in day-to-day life. Working as a team to put a financial action plan in place to address debt can help couples get out from under this burden, and as importantly bring more peace of mind to your household and relationship. It’s not the debt you bring into the relationship that matters, but how you work together to handle your debt over the long run.”
If you are planning on getting married and are concerned about your own or your future spouse’s debt, you may also want to speak to your attorney about pre- or post-nuptial agreements.
The Fulton family law attorneys at McCabe Russell PA can answer any questions or concerns you may have about marriage and divorce. We will help you protect your best interests and stand by your side. To speak with an experienced lawyer serving Howard County clients, please call 443-812-1435 or fill out our contact form. We also maintain offices in Columbia, Rockville and Bethesda.