Money & Marriage

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A short while ago I saw a filler piece on CNN about finances and marriage. One of the main points was that financial matters can spell doom for a marriage. This, of course, matches what I have consistently heard over the years: sex and money are supposed to be the major points of problems in marriages.

In the case of money, two main concerns are debt and honesty. Obviously enough, debt can be the source of marriage tension.  Worry about debt can cause a person stress and people who are stressed are generally not at their best. This can then lead to other problems or serve to acerbate them. For example, a person who is stressed out over debt might over-react to relative small incidents, such as her/his spouse getting home a little late or forgetting to pick up the milk. The debt can also cause various problems by eating up resources. To be specific, a couple that is in debt would be less likely to take vacations, get each other gifts, or do other activities that cost money. This can stress the relationship by making it less enjoyable. For example, a one spouse might come to resent having to do without going out to dinner or on vacation so as to pay off the credit card debt the other brought into the marriage.

As such, it is hardly a shock that it is a good idea to minimize the debt one has when entering into that most holy of economic contracts, marriage.

Interestingly, debt need not be a marriage killer and, in some cases, it can result in a stronger relationship. If, for example, a couple works together to reduce their debt, then this can give then a strong sense of being a cooperative team. Also, there are “good” (or at least generally unavoidable) debts that can help cement a relationship. For example, if a couple buys a house or car together and work as a team on the debt, this can help build feelings of trust and confidence.

Of course, if the people in the relationship do not work together or one partner did not want the debt, then these debts can turn into points of contention and resentment, thus serving as dividers rather than a source of unity.

There is also the obvious concern that if the relationship fails, then the debt situation can be a serious problem. To use an example from my own life, when my (now ex) wife and I bought a house, it actually brought us closer together as we worked on it. However, it soon turned out that I would be the one making the mortgage payments. This, of course, caused me some stress. When we got divorced (and money was one factor), I had to buy her share of the house that I had paid for and then re-finance it (so I now call it the “thrice bought house”). I am, in fact, still paying off these debts.

Thus, while some shared debts can unify a couple, big debts are not a decision to enter into lightly. Also, I suspect that entering into such big debts will be more likely to intensify what it already there (or even create new problems) rather than simply creating greater unity.

My take on debt is that it is best avoided. If it cannot avoided, then it must be well-managed with shared effort and a cooperate strategy.

Honesty is, not surprisingly, a rather important factor in marriage. Not surprisingly, partners sometimes lie to each other about financial matters. In some cases, the lies are small and mostly harmless. For example, a husband might tell his wife that the new laptop he got cost a bit less than it actually did. In other cases, the lies are big and harmful. For example, a husband might have told his wife-to-be that he only had a small amount of credit card debt when, in reality, he was being crushed under $40,000 spread over several cards.

While the debt or other financial problems (like a horrific credit rating) will create problems, lies (once exposed) will also damage the foundation of trust that relationships require to remain solid. The partner who was lied to will almost certainly trust the liar less and might be inclined to check up on other possible lies, thus leading to even greater stress in the relationship.

Obviously, honesty is (as always) the best policy. Of course, people are not always inclined to be honest and hence it does make sense to inquire into a potential spouses finances. While this might seem nosy or improper, it is important to recognize that marriage is fundamentally an economic relationship. In most cases, your spouse will own half of whatever you acquire in the marriage (with some exceptions) and you will almost certainly be affected by whatever financial baggage or problems they bring into the marriage. As such, it makes sense to approach marriage like the financial merger that it, in fact, is.

This concern about honesty needs to, obviously enough, extend into the marriage itself. I learned this the hard way. For example, after some extensive spending, my (ex) wife agreed to stop using my credit cards and returned them to me. Shortly thereafter charges appeared on my card and I thought someone had gotten my numbers. However, I eventually found out my (ex) wife had been able to buy things in person by giving my credit card number even without having the card. Out of anger, I ended up getting the account numbers changed and this, of course, led to even more conflict between us.

But, one might ask, what about love and all that? Should people look at marriage like they look at corporate mergers or investments?

Love is, of course, great and important. However, the legal aspects of marriage have nothing to do with love but rather are almost entirely about finances and property. As such, it does make sense to look at a marriage in the same way you would consider a corporate merger or an investment. After all, if you had a successful and profitably business, you would not want to merge with a business that was horribly managed and floundering in debt (unless you needed a big tax write off, of course).

Naturally, it can make sense to marry someone even if they come with considerable debt. The person might, as they say, be well worth it (that is, the person is so great that the financial stress is worth it). Also, if you are sure the person will be able to handle the debt responsibly and be able to carry his/her fair share in the marriage, then it can be well worth it. After all, most people have debt these days, especially when they are graduating from college.

So, my main advice is to try to minimize debt, shop smart for a spouse, and be honest.