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Money Issues and Divorce

There are hundreds of reasons people get divorced – from infidelity to battles over work and kids to irreconcilable differences. It comes as no surprise that a recent survey by personal finance site GOBankingRates found that issues over money could be a huge relationship deal breaker. The No. 1 Financial Deal Breaker for Couples in Every State, by Elyssa Kirkham, gobankingrates.com, February 1, 2016. The survey gave people in 50 states six options on which to vote as the biggest financial deal breaker: Doesn’t make enough money, Overspending, Poor credit, Secretive about finances, Too cheap, and Too much debt. Residents in more than half the states, including Georgia, said that “overspending” was their biggest deal breaker. This was followed by “secretive about finances,” “too much debt,” and then “poor credit.” Interestingly, “doesn’t make enough money” and “too cheap” were not winners in any state.

So what can you and your spouse do to avoid this relationship pitfall? First and foremost, get everything out in the open about your income, assets and debts. It never ceases to amaze me that so many people do not know anything about their spouse’s financial situation before getting married. Once everything is out in the open, sit down with your spouse and make a budget. It is important that you do this together so that all anticipated expenses are included. It also needs to be something that works for both parties.

Once you have made the budget, don’t just stick it in a drawer and assume both parties are adhering to it. Rather, take it out at the end of each month and see how well you have done. It might be that you need to tweak it a little bit based on what your actual expenses have been. This doesn’t mean that you should add an additional $100 per month for clothing just because one person has spent that. But, you may have noticed that you regularly spend less in groceries than you thought, or that the price of gas has gone up substantially – these should both be reflected in the budget.

For things that may not be expected, monthly expenses, spouses can decide to discuss before making purchases, or not. Some people choose a monetary amount, such as $250, and any purchases under that do not need to be discussed and agreed upon. The agreed upon amount will be different for every couple, so choose an amount with which you are both comfortable. While these tips may not completely erase a financial deal breaker, they will at least put you and your spouse on the same page as it relates to money. Making a realistic budget and adjusting it as necessary can at least help to get everything out in the open, and can assist you and your spouse in finding places to cut costs, if necessary.

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Divorce
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