Threading finances through love, marriage and divorce

Sharon Hamman

We are all familiar with the typical modern-day love story: person meets person, they fall in love, the lovebirds dream of living happily ever after, get married and then, well, they get divorced.

Even though that’s how one in four love stories end, it’s far from the end of the adventure. These love stories have a ripple effect and impact the financial future of people the lovers care about. Then again, how would they know when they are blinded by starry eyes and white dresses.

Divorce statistics: the devil is in the detail
Let’s take a step back and look at the facts. The marriage and divorce statistics for 2022 were recently published in March 2024. It did not paint the prettiest picture:

- The divorce rate increased by 11% year-on-year, with 80% of divorces coming from first marriages.
- Looking at race, divorce rates are the highest under the African population (54% of divorces), followed by couples in white, coloured and Indian population groups (jointly responsible for 39% of divorces).
- The average age of people getting divorced is 46 for males and 42 for females with 59% of divorce actions being initiated by females.

Financial discrepancies and economic abuse
Considering 80% of divorces are from first marriages and the average couple is getting married later in life, it stands to reason that the highest number of divorces are for those married between five and nine years.
While infidelity is one of the main causes for divorce, financial discrepancies also appear high on the list of other strong contenders like differences in priorities, lack of communication, and abuse.

Let’s focus on financial discrepancies and the influence these factors have on each other. If parties have different priorities in life, it will inevitably impact their financial behaviour and how they manage their finances. A lack of communication will also exacerbate this. If they are not open and honest with each other on their views and actions, it is bound to cause stress and feed mistrust in the relationship.

From an abuse point of view, financial (economic) abuse is not often talked about but more common than one would think. If one person has all the financial control, limiting the other’s financial freedom and ability to become financially independent, they effectively take control of that person’s life choices, which is most certainly a form of abuse. Why aren’t more prepared for financial challenges?

Couples seek pre-marital counselling but not financial advice
Going back to the beginning of our love story, it is common for couples to seek pre-marital counselling for guidance on how to protect the marriage and ensure its longevity.

Very few, if any, think of meeting a financial adviser at that stage of their lives (or any stage for that matter). But if couples can align their financial priorities early in their relationship, identify their differences and have a plan to remain committed to their joint financial goals, it can go a long way to eliminating conflict in future. It can set the scene for future financial security, wellbeing and independence. They will work towards the common goal, while retaining their own financial individuality.

A financial adviser can guide them through the process, including:

- Setting up a budget.
- Making short-, medium-, and long-term financial plans.
- Providing solutions on how to save to buy that first property.
- Guidance on how to eliminate and manage debt.
- Planning for the financial responsibility children will add (if that is part of their plan).
- Making sure a solid retirement plan is in place to work towards that happily ever after.

The beginning, but also the end – what about death?
A financial adviser can breach another uncomfortable discussion all couples should have earlier rather than later. However, when actively planning for death, each person can leave a legacy of love and care. Having a Will and making sure the surviving spouse (and children) are left financially secure is the perfect last gift when a marriage is tragically ended too soon. And if the worst is to happen, the financial adviser will be there to help the surviving partner build a new normal – with their financial foundation intact and stable.

How to take financial discrepancies off the divorce list
As they say – when financial problems enter a relationship or a marriage, more often than not, love escapes through the back door. This can be avoided by taking proactive steps early and remaining committed to the financial planning process during the course of the marriage and during the course of life. Couples can take financial discrepancies off the list of main causes of divorce by taking the very first step to a financially sound marriage: building a relationship with a financial adviser.