On the list of things that cause trouble between spouses, money is thought to be right up there at the top. So, in honor of Valentine's Day, to help keep the love alive, Alison Southwick and Robert Brokamp are dedicating this episode of the Motley Fool Answers podcast to questions at the intersection of marriage and finance.
In this segment, they reveal five fascinating tidbits. They start by digging into the common wisdom that money is the biggest source of tension in marriages, then pivot to the financial upsides of marriage, financial compatibility and more.
A full transcript follows the video.
This video was recorded on Feb. 13, 2018.
Alison Southwick: You have been taking financial therapy classes, and I don't know if your professor planned this on purpose, but you had a lot of reading to do these last couple of weeks around couples and cash.
Robert Brokamp: Yes. I'm getting my graduate certificate in financial therapy from Kansas State. It really was coincidental that for this last class I'm taking I had to do a bunch of reading on couples and their cash. And as we were talking about what to do for this episode, I thought, "Well, certainly after reading the 10 to 20 articles that I plan to read, I'll be able to pull out a few tidbits." So, what I found out was Five Things to Know...
Southwick: Tidbits is a funny word!
Brokamp: Tidbits! You don't like tidbits?
Southwick: No, I just think the DayQuil is kicking in. I'm sorry! Keep going.
Brokamp: Well, it just gets better from here!
Southwick: Let's get some love and money tidbits. Tidbit No. 1.
Brokamp: All right. So, "Five Things to Know About Marriage and Money" and then "Five Things to Do About It."
No. 1, I guess my first question was we all hear that money is the No. 1 reason people get divorced. The No. 1 cause of conflict in marriages. My first question was whether that is really true. So, No. 1 is whether money is the No. 1 source of tension in marriage. The answer is probably, but the results weren't quite as conclusive as I thought they would be.
There is research that found, for example, that 70% of all divorces cite money as the reason. There's research that shows that couples that fight on a weekly or daily basis about money are more likely to get divorced than people who have a few disagreements over the course of a month.
Southwick: How often do people fight?
Brokamp: Well, some people fight a lot.
Southwick: Why fight, period?
Brokamp: That is a good question and we'll get to that, later. So, there is a question of whether...
Southwick: I just can't imagine fighting with my spouse twice a week about anything. I don't know.
Brokamp: Rick, how often do you fight with your spouse?
Engdahl: What is fighting?
Southwick: You guys are such lovely, beautiful people that I can't imagine the Engdahls fighting at all.
Southwick: I cannot imagine that. I can just imagine them being like, "You know what, honey? When you leave your harps and your guitars out, I feel like maybe we should jam for a while." And then you guys just play some folk songs and smooch.
Brokamp: Can you fight when you have a harp? I don't think it's possible.
Engdahl: This is probably too much of a story, but we have a friend [a friend of mine from college] up in New Jersey. She had a daughter who was about five or six at the time and this was before we had kids. They were coming to visit us for the first time. We had been up there, before, and played our music, and blah, blah, blah.
Southwick: That's the tone that they fight in, by the way. That was it.
Engdahl: They came down, and when the daughter entered our house, she looked around and she was a little bit crestfallen. She was a little disappointed. And she said, "I thought your house would be full of flowers and incense."
Southwick: You enter the door and your wife places a flower garland on your hair.
Engdahl: Like we live at the Renaissance Festival.
Southwick: Drink some herbal tea.
Brokamp: I can totally understand that.
Engdahl: A couple of fairies blowing bubbles.
Engdahl: It turns out that's not exactly how we live day-to-day.
Southwick: Oooh! It's more like a metalhead situation going on in the Engdahl house.
Engdahl: We'll stick with your imagined view of what our lives are like. It's a nice picture.
Southwick: All right. That was a bit of a digression, but...
Southwick: It seems like that would be a lot to be fighting about anything, let alone money.
Brokamp: Yes, it's true and as I'll talk about a little bit later, there's some question about whether money is the real reason people are fighting, or if it's just that people are fighting, and money is the thing they've decided to fight about. Other studies found that one-third of couples who receive marriage counseling reported having financial issues as one of the problems.
But there are studies that found there's not really a very strong connection between money and conflict, or money and divorce, which again gets to this point that maybe it's not really just about money. And another interesting part about this is studies have found that arguments about money are a little different in that they tend to be more intense, they often last longer, and they often retread old topics. Old topics keep getting brought up. So, there is something about money that is important or contentious [when it comes to] marriages.
No. 2, though, is that money and marriage is not all bad news. The fact is on average for most people being married is good for your financial well-being. Married couples have higher incomes than any other family forms, meaning higher than people who live on their own or people who are living together but are not married.
People who are married tend to have higher levels of investments. Higher levels of wealth. Less debt. They're more likely to be saving for retirement and there's some belief about making that commitment. That public commitment about getting married makes people more likely to invest. More likely to buy a house. More likely to do things that will pay off over the long term vs. people who are single or people who are just living together and they're like, "I don't know if I want to buy a house with you quite yet." That's the good news.
No. 3. What determines whether a couple is going to fight about money or not. The truth is money can buy happiness to a degree in marriage. There's plenty of evidence that shows that couples with higher incomes, higher levels of wealth, less debt are more likely to be happier. More likely to find satisfaction in a marriage and less likely to fight about it.
One interesting study I found said that income -- once you incorporate other measures of financial well-being -- isn't actually important. What it really means is what you do with the money that you make. So, even if you're not making quite so much money, if you are saving it and staying out of debt, you're more likely to be happy and less likely to fight about money.
Another study found that couples who engage in sound financial practices [budgeting, saving, getting enough insurance] are more likely to be happy, even compared to other couples of the same level of financial wellness and wealth. People who are doing these good day-to-day financial chores are more likely to be happy.
One thing I would say, though. It does get to a point where all that stuff doesn't really explain happiness. For example, the difference between a couple that makes $25,000 and a couple that makes $50,000 [means] a big difference in their overall satisfaction because they're not going to be experiencing so much financial stress. The difference between a couple making $200,000 and $225,000 is not going to be so much. So, at some point, money doesn't really explain the difference.
What does explain it? This comes to point No. 4. Being financially compatible is important. There's a couple of studies that classify people as either tightwads or spenders, and my first reaction was I haven't heard the term tightwad...
Southwick: Tightwad, yeah.
Brokamp: ... in a long time. But, basically, do you see yourself as a tightwad or a spender, and see your spouse as a tightwad or a spender.
Southwick: It seems like it's a spectrum. Do I have to put myself in one or the other?
Brokamp: And you're right. It is a spectrum. And the most interesting thing about the spectrum is opposites often attract, so what they found was people who were tightwads were often attracted to the spenders and vice versa, especially if they were not satisfied with their own attitudes. Let's say you were a spender, but you knew that you probably are spending too much. You are more likely to be attracted to someone who is a tightwad, and vice versa.
The problem is that although you might be attracted to each other, once you get married that can be a problem, so the greater the distance on that spectrum of tightwad to spender, the greater chance that you're going to argue about money and there are going to be problems down the road. And there was also another study that analyzed people's materialistic tendencies. It found that when people had a higher score of materialism, chances are they were going to be less happy being married.
Southwick: All right, tidbit No. 5.
Brokamp: No. 5. If it's not about money, it's about... Want to take a guess?
Southwick: I don't want to say sex on our show, because I don't think we've ever said that word on our show.
Brokamp: You said sexy earlier in the show.
Southwick: Yeah, but that's like different than saying sex. I've done it again! What is it? Just say what the answer is!
Brokamp: It is the byproduct of sex -- kids.
Southwick: You just made it worse!
Brokamp: At least according to one study.
Southwick: Oh, kids!
Brokamp: Kids. Kids. This is one of those studies that found...
Southwick: I think Rick can't breathe, he's laughing so hard. Are you going to be OK, buddy?
Brokamp: Anyway. So, one study had a hundred couples keep a diary and write down all the times they had any sort of conflict. And money was No. 5 and No. 6 on the list depending on whether it was the husband or the wife. No. 1 was actually kids, and the next was chores, then communication and leisure. But this study also confirmed, again, that while money wasn't the most common contentious issue, the fights about it were more intense and they lasted longer.
Another study found that women with children living in the home were twice as likely to report being a money-arguing couple, and then another study [the tightwad-spender study] found that for men [not women], but for men who had three or more children, they were more likely to find themselves engaged in financial arguments. The point, here, is not that you shouldn't have kids. The point is, I think, that if you are married, you should make sure that you are on a firm, financial setting and you're comfortable with the relationship before you have kids.