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How Finances Affect Divorce Rates in America

by Lisa Parziale

When you’re talking about divorce, there are many factors to consider, including how finances affect divorce rates. Money plays a big role in divorce, more than you may think.

Consider these findings from a Ramsey Solutions study when it comes to finances and divorce:

– Money arguments are the second leading cause of divorce, behind infidelity.
– High levels of debt and poor communication lead to stress and anxiety when it comes to finances.
– Nearly half of couples with $50,000 or more in debt say money is their top reason for arguing.
– Nearly 2/3 of all marriages start in debt.
– 1/3 of people who argue with their spouse about money admit to hiding purchases because they know their partner won’t approve

It’s no surprise for married couples that money problems cause stress, even for people who are not married. When you add in the dynamics of marriage, the stress levels rise. This is why it’s one of the leading reasons why people get divorced.

The 12 biggest reasons how finances affect divorce rates

While everyone’s money issues may be different, several common ones are seen and can lead to divorce.

1.    Opposing attitudes on how to handle money

When you get married, you quickly learn that your spouse may have different viewpoints on just about every topic, including money and personal finance. You may be a saver while your spouse spends without thinking twice.

If you’re the one saving while your partner is spending, you may begin to resent them which will lead to problems and maybe even divorce. This is just one of the ways finances affect divorce. If you discuss your opinions towards money and can get on somewhat of the same page, this can save you trouble in the end. Couples should devise a financial plan.

2.    Mismatched financial priorities

You shouldn’t wait until after you say “I do” to discuss your financial priorities. These discussions should come well before the wedding. They should include discussions about what’s important financially. Do you want to buy a house? Do you dream of traveling the world? These are the types of things that cost big money and need to be discussed immediately.

When couples have mismatched financial priorities, they are likely to argue. Too many arguments and stress can lead to divorce.

3.    Credit card debt

Credit card debt can be a big stressor and point of argument. If one partner is racking up debt while the other is constantly paying for it, the one who is constantly paying is going to being to feel used and will begin to resent their partner.

Having a discussion about credit cards, their credit score, and being financially responsible can save a lot of headaches down the road. If you come into the marriage with a lot of credit card debt, there should be an agreement that each partner is responsible for the debt they’ve brought into the marriage. If there is no such agreement, you could be setting yourself up for problems down the road.

4.    Financial infidelity

If you thought that infidelity only has to do with having an affair with another person, think again. There is such a thing as financial infidelity. Financial infidelity is when you have secret bank accounts, undisclosed debt, or other things that indicate you haven’t been completely honest with your spouse about your finances.

Relationships are built on trust. When that trust is broken, there is room for disagreements. Too many disagreements and discontent can lead to divorce. Being open and honest about your finances is the best route to take.

5.    Overextending their budgets

While we may all want things, our budgets may not allow them. If a couple overextends their budget and starts buying things they really can’t afford, that can put stress on a relationship and marital satisfaction.

Some couples go for their dream home but then realize they can’t afford anything else. This can cause discontent and can lead to arguments.

6.    Inability to compromise on spending, combining finances and personal finance

In a relationship, everything is a compromise, even spending. You need to talk about money and how you each handle money to find common ground. If your partner wants to go out all the time, you need to decide that you can’t go out all the time, but can go out sometime. It’s little things like this that can make all the difference. Couples need to realize this. If couples can’t come to this realization, they will find themselves in a difficult situation and significant financial issues. This is one of the ways finances affect divorce rates.

7.    Major impulse buys and financial disagreements

That new car may look nice on the showroom floor, but if you decide to buy it without consulting with your partner, you may have a big problem. Major impulse buys are another way finances affect divorce rates.

If one partner continually makes impulse buys without consulting the other partner, there’s going to be a lot of friction in the relationship.

8.    Stress from combining bank accounts

Combining bank accounts and combining finances can cause stress if one partner thinks they are putting in more than the other. Some people like to keep separate bank accounts, but that can also cause trust issues.

If having one joint account for everything doesn’t sit well with you, some financial experts suggest having one bank account for you, another for your spouse, and then one joint one. This way each spouse has their own money but also has shared money for house expenses. You just need to talk about money make sure each partner is contributing equally to the shared account.

9.    Unexpected major expenses

No matter how much you plan, unexpected major expenses pop up. This can include having to do a major home repair, care for a sick parent, or having to make an unplanned trip.

Unexpected major expenses can put stress on a relationship in many different ways. From how to pay for it to how to save up again, couples can stress out a lot. It’s important to have open lines of communication to lessen stress, avoid disagreement and divorce.

10.    Spending too much on the wedding

Depending on where you live and what you do at your wedding, the celebration can get extremely expensive. The average cost of a wedding in 2020 was $20,300, which’s a decrease of about $4,400 from the previous year, but still a good chunk of change.

Spending too much on the wedding can put you in debt from the moment you say “I do”. If you spend too much and then don’t have money to buy a house or for other living expenses, you’re going to get stressed. You may even start to resent your partner if they’re the one that pushed for the expensive wedding.

Think about the cost of the wedding and how it’s going to affect your living situation before you get married. Couples who don’t discuss the cost and its effect may have issues that they can’t fix, ultimately leading to divorce.

11.    Not having pre-marriage financial counseling

Just as you would go to a therapist for counseling to discuss personal issues, you may want to consider pre-marriage financial counseling. Meeting with a financial advisor can help to discuss financial issues and get an unbiased third-party’s opinion on your financial situation. This person can advise you about how to proceed financially in your marriage. Their advice could mean the difference between happily ever after and the financial impacts of divorce court.

12.    Loss of financial control

If one spouse is the “breadwinner” and constantly reminds the other spouse of that fact, it can lead to feelings of lost financial control and financial disagreement. When this happens one partner can begin to feel unequal, leading to arguments and unhappiness.

Even when one partner earns more than the other, both parties should feel as though they are on equal footing. They should both have a say in the finances and use of household income.

Why having too much money can put you at greater risk of divorce

Many people may assume that couples who are having financial trouble are at more risk of divorce. While that certainly puts stress on a relationship, having too much money can also do the same.

Couples with a lot of money often have problems because even while they have a higher household income, they have higher monthly expenses. These expenses can put off their ability to save for retirement and unexpected expenses. When this happens, there is even more stress on a marriage.

Another way finances affect divorce rates among wealthier couples is that one partner often makes more, begins the marriage with higher net worth. This can leave one partner feeling subordinate. As we mentioned above, when one partner makes more than the other and constantly makes note of that fact, it leads to problems in a marriage.

The financial impact of divorce – How divorce age impacts finances

Divorce can impact the finances of people of all ages. But, for those who divorce after 50, the impact is more severe. Researchers have found that when you get divorced after 50, you can expect your wealth to drop by about half.

This is especially problematic because many don’t have the time or resources to make up for the loss. This can put them in financial trouble when it comes to retirement. Studies have found that divorced women ages 63 and older who went through a gray divorce have a poverty rate of 27%, which is more than any other age group.

Final Thoughts

It’s important to be aware of how financial difficulties can affect divorce rates. Knowing what problems to avoid can put you on a better path. It can also make you more conscious of being a better communicator when it comes to finances.

Also, if you are considering divorce, think about the point you are at in your life. This will not only impact your finances, but also all aspects of your life.

About Lisa Parziale

Lisa Parziale is an independent author that writes about various topics and owns a marketing company in North Texas. If you would like to contact Lisa, please use the information below.

Portside Marketing, LLC
1011 Surrey Lane, Bldg 200
Flower Mound, Texas 75022
(972) 979-9316

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