You know the stats. A successful marriage is no easy feat. However, handling the impacts of divorce can be an even more challenging experience.
To honour your promised bond, “’til death do us part,” it’s vital to address one of the most common causes of divorce: financial issues. By focusing on financial planning and communication in a coordinated way, you and your partner can strengthen your relationship and reduce the risk of divorce.
- Financial Teamwork: It’s essential for both partners to be actively involved in managing the family finances. While one person may be more financially literate, both partners should participate in making decisions about expenses, whether major or minor. Sharing responsibility for financial decisions can help prevent finger-pointing when things don’t go as planned. It’s quite common for one partner to take the lead, however ultimately decisions need to be made as a team – this eliminates any finger-pointing down the track.
- Third-Party Assistance May Be Wise: If you and your partner struggle to make financial decisions together, consider seeking help from a third-party. There are many reasons couples may not be on the same page, including differing goals, approaches, risk tolerances, or decision-making styles. A financial advisor or mediator can help bridge these gaps and facilitate constructive discussions.
- Embrace Financial Transparency: Both partners should have a clear understanding of your combined financial position. Creating a simple balance sheet to outline your joint assets and liabilities, as well as an income statement to recognise what cashflows are coming in, can be an effective way to promote transparency. Be wary of any attempts to hide assets or structure finances in a way that benefits only one partner. Establishing clear ground rules around financial management helps to protect both partners and prevent future disappointments.
- Foster Regular Financial Conversations: In much the same way as you work on your emotional connection, it’s crucial to cultivate open communication around money. Engaging in regular financial conversations can help align your goals and promote understanding of each other’s perspectives on money. It’s important that these conversations allow equal airtime for both parties, respecting the fact that we all have different upbringings, approaches and goals when it comes to financial topics. Ignoring one partner’s input for an extended period can lead to resentment and damage the relationship.
- Learn from Past Experiences: Those who have experienced divorce may be more open to discussing finances and establishing clear expectations early in the relationship, with a view to overcoming previously encountered issues. On the flipside, it is also important to be aware that some people may be overly suspicious or cynical due to dark memories. If you notice these warning signs, initiate a sensitively-raised conversation to address any lingering concerns.
So often we wait for a black swan event to act, when marital financial pain can be entirely preventable.
By actively engaging in financial planning and communication, you can create a strong foundation for your marriage and work towards achieving both your individual and shared goals. The effort may seem challenging, but the rewards of a lasting, loving partnership are well worth it.