Money matters and financial strains are one of the biggest sources of contention in a relationship. Most people can’t talk with their spouse and have a respectful and calm conversation about finances – they are either limited in their communication skills or it turns into a nasty exchange of words. It’s important for couples to regularly talk with each other, calmly about their financial situation, financial goals and create a budget.
Rachael Scharrer, founder of online resource LifeAnswered.com.au and DivorceAnswered.com.au, is all too familiar with the stresses of financial concerns on a marriage. She shares her top 6 financial stressors on a relationship:
1. GAMBLING AND ADDICTIONS. Gambling and addictive behaviours often has a basis with another mental health concerns. They should be viewed as an illness and something out of the conscious control of the suffering individual. For many couples, they don’t realise their spouse has a gambling or other addictive behaviour until it is late – like when all of the funds have been exhausted, second-mortgages created, additional credit card accounts opened and ‘maxed out’.
Solution: Encourage the addict to attend rehab or gambling anonymous meetings. Stop access to credit cards and other funds. Report the individual to the casino, regularly visited organisations and other anti-gambling register. Place this person on a budget and go to appropriate counselling together for strategy and assistance.
2. FINANCIAL DOMESTIC VIOLENCE. This is the least known form of domestic violence and is often associated with other forms of domestic violence (mental, emotional, physical, sexual). This involves the withholding, control and/or limitations of funds to your spouse. For some, they dictate to their spouse where the earned funds are to be spent. Financial abuse also involves withholding financial statements or forcing the partner to sign financial documents without understanding what they are understanding.
Solution: This is a difficult problem to find an appropriate situation. If you are planning to leave the relationship, I recommend that you get a job, save as much money as you can (before leaving) and open a bank account in your name only. It is essential that when you are leaving that you have support – refer to your Domestic Violence Police Liaison or local Domestic Violence organisation (like 1800 RESPECT) for further assistance.
3. UNNECESSARY SPENDING / OVER SPENDING. A lack of understanding of budgetary constraints. Spending on big-ticket items which aren’t necessary at the expense of meeting other associated living costs like utilities, rent/mortgage, education expenses, fuel etc.
Solution: remove credit cards and ask your spouse to use only cash. Make an agreement that you are both to decide on items which cost over an agreed amount (like $200). Create a budget and make an agreement that you will both stick to it.
4. HIDING AVAILABLE ACCOUNTS AND FUNDS: Lying to your spouse is not the way to conduct a respectful and supportive relationship. It will only be a matter of time before your spouse works out that there are other funds. Equally, claiming not to have money and forcing your spouse to support you while you keep your money for your personal purposes without the knowledge of your spouse is unethical, deceitful and doesn’t make for a healthy relationship.
Solution: if you are concerned about your asset pool and potentially losing it, instigate a Binding Financial Agreement or Pre-Nuptial Agreement. Review and re-sign these documents periodically or as your financial circumstances change.
5. ECONOMIC DOWNTURN / DEBT: Often people jump on to the low interest rates. However, when we experience an economic downturn, which is predicted to happen in the near future, interest rates will sky-rocket, house prices will fall and the cost of living will rise. This leaves many couples in the predicament of not being able to afford their home and mortgage… worse still, if they try to sell, then they will make a significant loss on the home and remain in debt.
Solution: If you own your home, rent it out and then rent a smaller place for you, your spouse and family. If you are unable to relocate, then rent out any spare rooms via Air B’n’B or to an international or student boarder.
6. UNEMPLOYMENT: Nowadays, most people don’t have savings and are ‘one pay cheque away from poverty.’ Not bringing in money while the utilities and invoices keep coming is a stress that many families and couples struggle to navigate. If one spouse has an income that can keep the bills at bay, then it buys a little time but places a great burden on the sole income earner. There are always jobs available, they are often the ones that people feel are beneath them. However, when you are facing financial strain, something is better than nothing.
Solution: retrain or reskill with the assistance of Centrelink or Job Active organisations. If you are genuinely under stress, then approach not-for-profit organisations for assistance.
Sadly, many couples who are not able to get on top of their financial woes do end up in divorce. To avoid this happening to you or if you feel that you and your spouse are headed for financial troubles, meet with your individual or family accountant for advice tailored to your situation.
For those wanting to understand their budget, Divorce Answered has afree budget tool.
For individuals experiencing domestic violence, access Divorce Answered’s ‘how to best separate: domestic violence’ e-book. RRP $15.
