Frequently Asked Questions: Finances and Marriage

Frequently Asked Questions: Finances and Marriage

Research-based answers to important questions related to forming and sustaining healthy remarriages.

Marriage puts two individuals into a setting in which they must work together to manage and use their
money. It is easy to forget that marriage is a financial partnership as well as a romantic relationship. Yet
financial practices and patterns can help or harm marriages.

These FAQs answer some common questions about finances in marriage using findings from
scientifically sound research. Unfortunately, researchers have not explored the relationship between
finances and marriage as thoroughly as the topic demands. 1 So research doesn't have all the answers,
but the research that has been done can shed a great deal of light on many questions.

Questions:

Q1. Do financial problems lead to marital problems and divorce?

Q2. Do financial problems affect marriages early on, or do these problems emerge later?

Q3. How does a person's financial background or current financial situation affect his or her chances of
marrying?

Q4. When a husband and wife both earn an income, do they have a higher or lower risk of divorce?

Q5. Are there some specific financial practices that are associated with healthier marriages?


Q1. Do financial problems lead to marital problems and divorce?

A1. • Different Research Approaches, Different Answers. Much of the research on the relationship
between financial problems and divorce is based on the reasons given by people who are already
divorced. Recently, however, several studies have been done that have followed couples for
many years. These studies include couples who were still together, as well as those who
eventually divorced. The answer to the question of whether financial problems lead to marital
problems and divorce seems to differ depending on how researchers conduct studies. When
individuals are asked after a marriage ends about the reasons for their divorce, financial problems
do not rank especially high as a cause of the dissolution of the marriage. When researchers
examine the factors that predict an eventual divorce, however, financial problems do loom large
as a cause of the divorce. The reasons that individuals give for a divorce after a marriage ends
may not reflect the reality of how important the financial problems were. 2 More details are given
below.

• After-Divorce Explanations. One study, which was based on a nationally representative sample of
American adults, asked couples to report the causes of their divorce. The study found that only 2
percent of previously divorced individuals said that financial problems were an important cause of
their divorce. Similarly, in another study, only 11 percent of husbands and 8 percent of wives
reported financial problems as one of the most common problems in their relationship. 3


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• Predicting Eventual Divorces. However, when researchers examined what factors eventually
predicted divorce — rather than asking divorced individuals to provide explanations for the end of
the marriage — financial problems emerged as a strong and consistent predictor. (These
problems accompanied jealousy, infidelity, and drinking/drug use as the strongest predictors of
divorce.) When an individual felt that his or her spouse handled money foolishly, the odds of
eventual divorce more than doubled. Not only were financial problems a strong predictor of
divorce, but couples who mentioned financial problems as a problem also were more likely to
divorce quicker than were couples who mentioned other problems. 4 And disagreements about
finances appeared to be an important predictor of divorce for both men and women. 5

• Lower-Income Americans. Some of the studies on finances and marriage had difficulty including
samples of lower-income Americans, so financial problems may be even more important than the
research has found. Lower-income individuals appear to be much more likely to list financial
problems as a cause of their divorce. This result is consistent with the finding that African
Americans, who generally have lower incomes than do whites, were twice as likely to say that
finances were a problem in their marriage than were whites. 6 In contrast, higher-income
individuals were much more likely to say relationship problems (e.g., poor communication) were a
cause of their divorce, rather than financial problems or other practical considerations. 7

• Greater Stress. Financial problems are associated with increased levels of stress for spouses,
decreased levels of marital satisfaction, and troubled feelings about failing as a breadwinner.
Thus, the elimination or resolution of financial problems contributes to happier marriages. 8
However, other kinds of stress can have an important effect on marital satisfaction as well. A
study of a random sample of adults in Utah measured the impact of financial stress and three
other kinds of stresses on marital quality: stress in one's home life (e.g., daily stresses around the
house); stress caused by relatives (e.g., relationships with in-laws or family members); and stress
caused by the number of children. The study found that while financial stress decreased marital
quality, its impact was not nearly as strong as that of daily stress in one's home life. 9

• Hostility. Financial problems (e.g., low income and/or strong economic pressures) seem to
increase individuals' levels of hostility toward their spouses, which in turn, decreases marital
satisfaction and increases the sense of marital instability (i.e., couples thinking that they might get
divorced). And generally, greater levels of marital instability are associated with a greater risk of
divorce. 10

• Income Changes. An increase in either spouse's income seems to reduce the risk of divorce,
whereas loss of income increases that risk. 11 The effect of job loss on the risk of divorce is two-
to-three times stronger for African American couples than it is for white couples, perhaps because
African American couples tend to have fewer financial resources with which to buffer the stress of
losing a job. 12

• Buffering Financial Stress. In the face of financial stress, several factors help to lower levels of
marital conflict and distress, such as effective couple communication and problem solving, solid
social support from family and friends, and good emotional health. 13

• Summary. Not many people who have divorced say that financial problems were a big reason
why they did so, but research on what predicts eventual divorce shows that economic stress and
financial problems increase the odds of divorce. The link between economic stress and divorce
appears to be stronger for lower-income couples. Financial stress appears to lead to more hostile

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interactions between spouses, which decreases marital satisfaction. Effective couple
communication helps to buffer financial stress so that it does not harm the marriage. More
research on this topic is needed, however, particularly as it relates to lower-income families.

Q2. Do financial problems affect marriages early on, or do these problems emerge later?

A2. • From the Beginning. Financial problems affect marriages from the very beginning of the marriage.
Financial patterns established in the first two years of marriage can foreshadow a couple's long-
term prospects more than a decade later. 14 One study found that the initial division of
responsibilities for handling family finances in the first few months of marriage was related
significantly to subsequent marital satisfaction and divorce. Establishing a fair and equitable
pattern of handling money early in marriage appears to be important for the quality and stability of
the marriage. 15

• Newlyweds vs. Longer-Married Couples. Financial issues may be most stressful on newly
married couples. In one study, couples who had been married less than a year were asked about
the most problematic areas in their marriage. Debt brought into marriage was the most
problematic area reported by wives and the second most problematic area reported by husbands.
Also, making decisions about finances was another commonly reported problem among these
newlywed couples. 16 Other studies that examined couples married five years or less found
similar results. Debt and the current financial situation (e.g., income, monthly expenses, savings,
etc.), were common concerns. 17

• Summary. The research on financial problems in marriage finds consistently that financial
problems can affect marriages negatively in the earliest years of the marriage. This finding
suggests that individuals often bring financial problems into their marriages. It also suggests that
learning good money management skills before marrying is an important way to prepare for a
successful marriage.

Q3. How does a person's financial background or current financial situation affect his or her chances of
marrying?

A3. • A person's financial background and financial situation can affect his or her chances of marrying
in several ways. Below are some of the research findings on this question. The answers are
somewhat different for men and women and for higher- and lower-income individuals.

• Men's Earnings, Prospects. Men with higher earnings, better and more secure jobs, and stronger
economic prospects are more likely to marry. 18 Men's employment, earnings, and prospects
matter even more for African American women in deciding to marry, compared with white women.
19

• Men's Regular and Legal Earnings. For lower-income women, the total income that a man can
generate is clearly an important factor in their decisions to marry. But so are other financial
factors, such as having regular earnings, the effort a man expends finding and keeping work, and
the source of a man's income (legal vs. illegal). 20


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• Women's Earnings. Women who have higher earnings — and who have higher earnings potential
— are more likely to marry, compared with less advantaged women. 21 But the positive effects of
women's earnings on their chances for marriage are not as large or as consistent as are the
positive effects of men's earnings on men's chances for marriage. 22 Similar to findings for men,
women's income is more important in predicting marriage chances for African American women
than it is for white women. 23

• Women's Economic Independence. Women's growing economic independence and commitment
to education and career in early adulthood generally delay the age at which women marry.
However, greater education is still associated with a greater likelihood that they will marry
eventually. 24

• Family Pressures. Single mothers who contemplate marriage to lower-income men often do not
marry them because family members and friends convince these women that such a marriage
would collapse under economic strain. 25

• Women's Compromises. African American women who hope to marry a man with enough money
to enable them to live comfortably and respectably may be more willing than are white women to
compromise on other desired factors in a spouse. This willingness may reflect African American
women's perceptions that their chances of finding a marriage partner with sufficient economic
resources are lower than are the chances of their white counterparts. 26

• Women's Public Assistance. Women who have spent more time receiving public assistance and
who have lower incomes are less likely to ever marry, and these factors are stronger predictors of
never marrying than is education level. 27

Q4. When a husband and wife both earn an income, do they have a higher or lower risk of divorce?

A4.
• It Depends. The number of two-income couples has increased substantially over the past few
decades. The research on how wives' income influences the odds of divorce has produced some
inconsistent findings, but recent research has made the relationship between these factors
clearer. That research shows that the effect of wives' income depends on wives' happiness and
how much wives make compared with their husbands' earnings.

• Marital Satisfaction. If wives are not particularly satisfied with their marriage, then their income
appears to increase the odds of divorce, probably because the income gives them more
independence to leave an unhealthy or unsatisfactory relationship. Among happily married wives,
their income does not seem to increase the odds of divorce. 28 One study suggested that if wives
perceived that their marriages were in trouble, they either sought employment or tried to increase
their work hours, perhaps trying to establish a more secure financial footing if a divorce were to
occur. 29 In two-income families, the higher the husbands' earnings, the lower the odds of
separation or divorce appear to be. But when the husband's earnings are low, a wife's earnings
seem to play an important role in reducing the chances of divorce, if she is happy with the
marriage. 30

• Equal Incomes. If wives earn substantially more or less than their husbands, then divorce is less
likely. But if wives earn about the same as their husbands, this situation seems to increase the
odds of divorce, especially when these wives are less happy in their marriages. One possible

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explanation for this interesting finding is that couples in which wives and husbands earn about the
same are less dependent on each other, compared with couples in which one earns substantially
more than the other (usually husbands earn more than wives). And when this reduced
dependency is combined with unhappiness in the marriage, the ties that bind spouses together
are weaker. 31

Q5. Are there some specific financial practices that are associated with healthier marriages?

A5. • Savings, Investments, and Debt. Greater savings and investments reduce feelings of financial
pressure, which, in turn, decreases marital conflict. In contrast, greater financial debt increases
feelings of financial pressure, which, in turn, increases marital conflict. 32

• Sharing and Specialization. It seems logical to many people that if wives and husbands share
financial management responsibilities, they will have healthier marriages. One study found that in
happier couples, wives had significant influence in financial matters, such as withdrawing cash,
paying bills, and managing expenditures. However, this study also found that while husbands and
wives in happier marriages both took part in the couple's financial management decisions, they
generally practiced role specialization. Role specialization occurs when each partner helps
manage the finances, but each specializes in different aspects of the finances. For example, one
spouse may be in charge of paying the monthly bills and buying groceries, while the other spouse
may be responsible for deciding how surplus money is spent and balancing the checkbook. It
should be noted, however, that this study is now more than 20 years old. 33

• Home Ownership. Owning a home significantly reduces the risk of divorce for couples married
more than 10 years. Home ownership may reflect a confidence and an investment in the
marriage; it also means higher potential financial losses if the marriage dissolves. Homeowners
face risks for divorce that are substantially lower (by roughly one-third) than are the risks faced by
other couples who do not own a home. Of course, couples at high risk for divorce may avoid
expensive investments, such as the purchase of a home. 34

• Early Practices. How couples decide to handle financial matters in the first few months of the
marriage can have an impact on the quality of their marriage down the road. Establishing fair and
equitable financial practices at an early stage in the marriage is another valuable pillar in the
foundation of a healthy marriage. 35



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