However, I do have a friend who is married to someone who is a financial wreck (here’s a red flag, he had filed for bankruptcy before they met) and he has caused her to be a financial wreck too. Unfortunately she cannot afford to have a divorce and a single mother and cannot afford to take full custody of the children so they are trying to work on it because the alternative would actually be more costly. It has definitely caused a rift between her parents and him.
Not only is it an emotionally trying time, trying to figure out your new identity as an individual and not as part of a couple, adding another level complexity with the disentanglement of money and assets is part and parcel of the divorce process.
Money and Marriage
This Moneysense article sums up the potential issues of divorce nicely. Pensions, homes, and even debt is up for grabs (or splitting I suppose). Get to know your significant other before you get married. Obviously it’s very important to see if their values of money management match with yours. Considering money is the number one issue that lead couples to divorce, it is very important to have a similar view of money with your partner. So, how do they handle their money? Are they in debt? How did their family view money when your partner was growing up?
Everything is at Risk… Even your Retirement Savings
Not only is the $25,000 that you spent for the wedding at risk of being a complete waste of money, your retirement savings (and surprisingly for some, even personal pension) is up for grabs in a divorce settlement. Lawyer fees are costly. This Globe and Mail article mentions that a lot of divorces happen after a few decades of marriage, just before individuals are ready for retirement. This obviously puts strain on retirement planning. Therefore, it’s safe to say that marriage is definitely not a laughing matter and you should think very carefully before taking the plunge. Engagement and wedding planning often distracts couples from red flags and issues in the relationship. It’s easy to get carried away with wedding planning and forgetting the important aspects in a relationship like trust, honesty, respect, and forgiveness.
Talk to Your Honey about Money
Well, the moral of the story is that you need to be talking to your honey about money. The more you argue about money (e.g. the more frequently you argue about money, like if you argue every week), the higher likelihood that you will get a divorce. Therefore, you want to get on the same page (or at least understand) as your partner when it comes to money. When dating, make sure your financial values align.
Related: Finances and Relationships
If you need a little inspiration, check out this comprehensive Chatelaine money and marriage guide. In addition, the Financial Post has some great questions to ask in order for you to segue the conversation to money. After all, we should be open and honest about what makes us who we are, and our money values, thoughts about money do make us who we are, since where we spend our money (or not) is a reflection of our values.
It certainly makes you think twice about how much you want to spend on that wedding doesn’t it?
Readers, do you have any ‘how to prevent a financial catastrophe aka divorce’ tips?