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As it pertains to finances and romantic relationships, there’s a big dichotomy. On one hand, it’s widely known that money matters are often contributing factors in dissolving relationships, including divorces.
On the other hand, money conversations between couples are still considered taboo. What’s all the more stunning about the extent to which couples are reluctant to discuss finances are the various studies confirming the “forbidden” nature of money talks is applicable to couples of all types and the surprising point that the relationships’ participants would rather discuss their partners’ past sexual trysts than talk about money.
Compounding the contradictory nature of those points are couples’ views on financial infidelity. Put simply, many people view “financial cheating” on par with or in a more negative life than sexual infidelity. Yet for some reason, couples delay having conversations about money with many waiting to do so until after they’re married when in reality those talks should be conducted before saying “I do.”
Make Time to Have ‘The Talk’
A recent survey of over 1,000 Americans by Western & Southern confirms that those polled are delaying important money conversations. Believe it or not, 21% of those polled said they’ve never had a financial conversation with their spouses while another 27% said it was only after they were married that such a chat took place.
Sure, “better late than never” is applicable here, but couples should endeavor to avoid the “never” because that can breed financial secrecy – arguably financial infidelity – and that can be ruinous in romantic partnerships.
“28% of married Americans admit to hiding significant purchases or debt from their spouse, and 40% would end a relationship due to financial dishonesty,” according to the survey. “Divorced Americans are over 3x more likely to suggest keeping finances separate than married Americans (25% vs. 8%).”
Making matters worse is the sheer breadth of the financial topics couples aren’t discussing until after tying the knot. At various percentages, couples wait until after they’re married to have conversations about life insurance, investment accounts, debt burdens, retirement savings and, believe it or not, their annual salaries.
Give Gen Z Credit
The Western & Southern study also highlights some important demographic trends regarding couples and money conversations. While just a quarter of all Americans get married with a financial plan in place, that percentage nearly doubles in the Gen Z cohort. So it can be said that in some respects, younger couples wiser than their older counterparts.
“Among age groups, Gen Zers expressed the highest levels of financial dependence on a spouse (66%), exceeding millennials (53%), Gen Xers (51%), and baby boomers (49%). Gen Z was also more likely than other generations to regret not discussing debt sooner than they did (38%),” notes Western & Southern.
And in what might come as a surprise to advisors, the big financial issue Gen Zers wish they had discussed with spouses prior to tying the knot wasn’t debt, investments or salary, but life insurance.
Related: Annuities Are Client Retention Tools