April is Financial Literacy Month, and my line of work lets me take an abnormally deep look into how money works within a marriage. After helping more couples than I can count divide their assets, I’ve come to the conclusion that when just one spouse is solely in charge of managing the bills and saving for retirement — understanding what is going in and what is coming out — it breeds resentment. If you are the person doing all the household bookkeeping, it can breed resentment because you feel underappreciated for bearing the brunt of that responsibility, and if you are the spouse who isn’t the bookkeeper, being financially dependent on someone else can breed resentment, too.
Really, in a healthy marriage, you want to be in a partnership where both people feel like equals in contribution. It doesn’t matter if one person contributes by upkeeping the home and one contributes by bringing home income, both partners need to see the value in what the other brings to the table. Both partners need to have their eyes wide open and understand whether or not they’re living within their means. Both partners need to have some level of literacy about what retirement planning looks like. They both need to understand things like what distinguishes an IRA from a 401(k) and what their lifestyle will look like in 20 years at their current savings rate. That’s the sort of shared financial literacy that empowers a marriage and builds a true partnership.
If a marriage does end in divorce and one party has delegated the management of their financial life to their spouse, having an imbalanced understanding of the finances can cause a lot of problems. It can cause the non-bookkeeper spouse to believe there are assets they don’t know about, and both partners can end up spending a ton of money on attorney’s fees that would have been easily avoidable if they both knew from the beginning what it took to support their lifestyle. In this situation, a spouse might be fighting over assets that aren’t even there and depleting what’s left of the couple’s collective assets in the divorce process.
On the other side of the spectrum, you might have a spouse who is financially abusive. In this scenario, if you haven’t nurtured your own financial literacy, you risk losing out on assets that you are legally entitled to. I had one client who chose to stay in the home and care for several disabled children. She moved several times in support of her spouse’s career, but once they headed toward divorce, her husband made her feel like she hadn’t contributed to building their assets. Of course, that’s not how the law sees it, and for good reason. Think about it: if that couple had paid for child care all those years — not to mention if the husband hadn’t been able to move for work to build his career — how much worse off financially would that couple be?
Clearly, the cost-benefit analysis of her time told a different story, but when you don’t take time to cultivate financial literacy within a marriage, that is the kind of situation you might find yourself in. In that particular situation, it was my job as her attorney to protect her from her spouse’s abusive accusations and remind her that as far as the law was concerned, she was an equal in what the marriage created.
Regardless of which side of the coin you fall on, allowing yourself or your spouse to be in the dark when it comes to money isn’t good for your marriage, and it isn’t a risk worth taking. This April, for Financial Literacy Month, my hope is that you do just one thing to make sure your marriage is a financially empowered partnership. When you and your spouse talk openly about finances, everybody wins!