Don't Let Your Financial Differences Lead to Divorce

Don't Let Your Financial Differences Lead to Divorce

Financial differences rank among the leading causes of divorce among couples, both young and old. The statistics are alarming, but perhaps not surprising. How we handle money is not usually a topic of that comes up while we are dating. As a result most couples don’t discuss financial compatibility before saying “I do”. When the honeymoon is over, though, and the bills start rolling in, couples often experience a reality check. While love is grand, it can’t pay the bills so it may not take long before fights erupt over different money habits.

Part of the problem is that it is simply uncomfortable to talk about money. Whether we like it or not, we tend to tie our own feelings of self-worth to money matters. It’s not uncommon to see how much money we make as a direct reflection of how much we are contributing to the relationship. These feelings can become further complicated if there have been financial missteps along the way. While avoiding conversations about money can allow us live in a blissful state of denial for a while, the long-term consequences can be life-altering.

The good news is that it is never too late to make meaningful changes and save a marriage that is threatened by financial discord.

According to financial planners who work with couples, money conflicts fall under five main categories:

  • Differences in spending and saving habits
  • Disagreements about who should control the money
  • Differences in priorities
  • Dishonesty about debt and habits
  • Differences in risk profiles
     

Whether you are experiencing frustration around one of these issues or all five, there are ways to build better financial health as a couple and avoid relationship problems.

Effective Communication Leads to Greater Financial Success


Effective communication can make a world of difference when it comes to financial matters. Establishing trust, which is cultivated through honest communication, is key. Trust is built when each partner commits to openly expressing their feelings about money and listening to what the other partner has to say. This includes being willing to reveal financial failures, knowing that your partner will be forgiving and withhold judgment.

Be Willing to Compromise


Although it is easier said than done, another key to resolving money issues is compromise. The first step is for both partners to sit down and agree on a common set of financial goals and what steps they will take to meet those mutual goals. Establishing a family budget – and committing to it – is critical. That budget should include some freedom for spending on things that are important to both partners, regardless of who is earning more money.

Be Patient


As you begin the process of rehabilitating your financial health and establishing clear lines of communication with your partner, remember to be patient. Keep in mind that spending habits are deeply ingrained in each of us. Both you and your partner have been influenced by your parents’ habits and your approach to money has been formed over a lifetime of experiences.

Enlist the Help of a Financial Planner


Whether you need help mediating tough conversations or you want expert advice on how to establish a budget that will help you meet your financial goals, don’t try to go it alone. Work with a financial advisor who can offer helpful insights and steer you in the right direction. With the right help, you can get back on track financially and strengthen your relationship. If you are to the point where money issues are creating such a strain on your marriage that you are considering divorce, outside intervention from an experienced financial advisor can be critically important in finding solutions that work for both of you.

Avoid Conflict


Often couples will argue about whether they should give or loan money to family members. While each case is different, and very personal, it is generally a good idea to try to avoid making these kinds of loans. Once that first loan is made, you have set a precedent and you are more than likely to receive follow-up request for additional money. While it can be difficult to say no to friends and family, it is always in your financial best interest to avoid these types of transactions.

A Happy Ending


Even in the best marriages, there are bound to be differences over finances, but those disagreements don’t have to drive a wedge between you and your partner, or worse, lead to divorce. If you actively work to establish trust through open and honest communication and recognize when it is time to seek outside help from a fee-only fiduciary financial advisor, you are taking important steps to letting your financial life be a solid foundation for your marriage – and not the wall between you. - See more at: http://www.shermanwealth.com/financial-differences-divorce/#sthash.FTEGsKav.dpuf

Brad Sherman
Advisor
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Brad Sherman is a financial advisor and the founder and president of Sherman Wealth Management, LLC, an independent, fee-only, boutique Registered Investment Advisor that make ... Click for full bio

Why Lasting Change Is Hard

Why Lasting Change Is Hard

Before we had any children, my wife and I lived in the heart of Dallas. One day, on our way back to our house, we were driving down Skillman Avenue when we were caught in a sudden torrential downpour.

The rain was coming down incredibly hard, which wouldn’t have been a problem if the storm drains were equipped to handle that much water. Instead, the road itself filled with water faster than we could have anticipated. Quickly, the water rose up the side of our car. Trying not to panic, we realized that we could not continue and would need to turn around and get to higher ground.

Water rising up the side of your car door is the kind of roadblock you might not expect to encounter, but when you do, it’s formidable. We couldn’t drive through it or even around it. We had to deal with it quickly or face serious consequences.

When we’re trying to implement change in our own lives, it’s important to identify and plan for common roadblocks to lasting change.

The first and, in my opinion, most important roadblock to lasting change is not addressing the real issue.

Let’s say you wake up in the middle of the night with a sore throat. You’re annoyed by feeling sick but your throat really hurts, so you get up and spray a little Chloraseptic in your mouth and drift off to sleep. When you wake up the next day, you still have a sore throat, so you pop in a cough drop and go about your day.

The change you’re making – using a numbing agent – might work if you’ve only got a cold, but if it’s strep throat, you’re not addressing the real problem. Only an antibiotic will cure what ails you, even if Chloraseptic will keep the pain at bay for a while.

Just like how more information is needed to diagnose your sore throat than one feeling, problems you encounter in your life or business require diagnostics, too. Figuring out the real problem – not just your most apparent needs – requires some introspection and a little bit of time.

Here are eight questions to ask when you need to discover the root cause, courtesy of MindTools.com:
 

  1. What do you see happening?
  2. What are the specific symptoms?
  3. What proof do you have that the problem exists?
  4. How long has the problem existed?
  5. What is the impact of the problem?
  6. What sequence of events leads to the problem?
  7. What conditions allow the problem to occur?
  8. What other problems surround the occurrence of the central problem?
     

Once you have your answers to these key questions, you can’t stop there. Your vantage point is skewed from your own perspective. You’re going to want to ask someone else to evaluate the problem at hand with the same questions and then compare your answers.

If you and all of the partners at your firm have similar answers, you’ll know you’re on the right track. If you wind up with wildly different ideas, I suggest seeking the advice of someone outside your organization. Fresh eyes can make all the difference in understanding a problem.

I often talk about being ‘too close’ to understand. You’ve probably heard the illustration about a group of people standing by an elephant with blindfolds on, trying to describe what they’re experiencing. Depending on what part of the elephant you’re next to, you’re going to have different observations.

But someone outside of that elephant’s cage can clearly identify the elephant.

The first key to making a lasting change is to make sure you’ve addressed the real problem and are looking for authentic change.

Next time, we’ll address the second major roadblock to creating last change.

Jud Mackrill
Digital Marketing
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Jud Mackrill serves as the Cofounder of Mineral. At Mineral, his focus is helping investment advisory businesses focus on growing digitally through full-scale design, brand de ... Click for full bio