Financial stress - the real relationship killer

Wilson Luna

I do or I don’t? It turns out that financial security plays a big part in whether couples stay together. If you want to prevent money problems from wrecking your love life, read on!

You know how wedding vows tend to go: ‘For richer, for poorer … till death do us part’? That may sound nice, but the truth is that financial stress can prove toxic to relationships. In the 2009/2010 financial year 52,498 couples filed for divorce in Australia, supporting the current estimate that one in three marriages are likely to end that way. While the reasons behind the separations vary it appears that financial stress is playing a big role in relationship breakdown – and it’s no wonder. The Wesley Report of October 2010 revealed that more than a third of people in NSW alone were experiencing financial stress.

Recent figures from a Relationships Australia study show that 71 per cent of people believe that financial strain pushes couples apart, with 43 per cent stating that money problems create too much tension in the relationship, and a further 16 per cent saying that it causes fights. No kidding - really? But according to Wesley Mission 60 per cent of households currently suffering financial stress are also experiencing health, relationship or social problems. Because money problems don’t exist in a vacuum – when the money trouble starts, other problems can pile up. And while you might think your marriage could survive a few fights about money, getting slogged with related stressful issues too can really wreck a relationship.

But the other problem is this: while money issues may be causing your relationship problems, divorce might not solve your money problems! Divorce means facing a huge number of financial challenges – particularly for women, who lose 42 per cent of their annual income after divorce on average, and are also likely to gain primary custody of the kids – and it can be really hard to get your life back on track when your resources have split with your relationship.



Money problems can happen to anyone – and it isn’t always somebody’s fault. Many people simply don’t know what to do to take charge of the situation and what steps will improve their financial position, and that’s when things can spiral out of control. Only 12 per cent of people surveyed by Wesley Mission said they’d seek advice from a financial adviser if faced with financial problems and only five per cent said they’d go to a financial counsellor, with the rest relying on non-professional help – or no help at all. So if your relationship is on the rocks (or thoroughly shipwrecked) due to financial stress, getting good advice and taking positive action is vital to getting your life and your finances back where you want them to be.



If your home life is suffering …

From arranging special payment plans with your creditors to refinancing your mortgage or changing the priorities in your family budget, there are several things you can do to take the pressure off. Get advice from a financial adviser or counsellor to help you find the best options for your specific circumstances and stick to whatever arrangements you make. If you’ve been sharing bank accounts with your partner, now might be a good time to stop – creating separate ‘spending’ accounts with limited amounts in them and one joint account for bills can help to keep you from playing the blame game.



If you’re separating …

Be as amicable as possible. Settling property and custody matters out of court can save you thousands, and let you and your ex come to an agreement that better suits your individual needs than could be achieved by letting the courts apply a standard formula. Remember to get independent financial advice as well as legal advice throughout the process, and try to keep your meetings with professionals brief and highly productive so that you get the best value for your money. (You can get more advice about how to do this from our book – Real Money Advice for Divorce.)



If you’re starting over …
When the divorce process is done, it can be tempting to splurge – spending a good chunk of your settlement on a holiday or a nice car to make yourself feel better. But if you want to be financially secure in the future, it’s important to make solid investments that will support you for years to come. Make a plan with your financial adviser to put your money to good use, and budget realistically – you can still have the car and the holiday, but you’ll be much better off in the long term if you save up for them!

Money problems can put serious strain on a relationship and end up turning ‘I do!’ into ‘I don’t!’ By taking charge of your financial situation you can take steps to improve it – and by taking the toxicity out of your financial life, you give your love life a fighting chance!

Author's Biography

Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.