It’s pretty typical: when couples combine their households, they divide up household duties and chores.
One handles grocery shopping, the other manages yard work. One is in charge of bills, the other handles insurance.
After all, dividing responsibilities is one of the advantages of a join household, right?
Well, there are disadvantages, too, particularly when it comes to dividing up financial responsibilities.
A recent study in the Journal of Consumer Research showed that leaving one partner out of the financial picture early in a relationship can have consequences down the road.
According to the study, couples tend to assign financial responsibilities more or less arbitrarily, not based on particular financial knowledge. Often, couples have similar financial literacy skills.
However, over time, the partner who is less involved in finances loses basic financial literacy, becoming dependent on the household Chief Financial Officer, so to speak. The longer this goes on, the wider the gap in financial literacy.
This means that, should the CFO be removed from the picture or become unable to continue managing the money, through divorce, degenerative illness or death, the partner is left to handle household finances without the skills to do so, often at an additionally stressful time in life.
The financial literacy imbalance may be of particular concern to older couples, who may also be dealing with more complex financial issues during retirement.
Help your audience remedy – or avoid – this imbalance.
For Older Couples
- Find and share financial literacy resources especially designed for older people who may not have much experience managing finances.
- Are there any courses provided by city, local community college or library?
- Can you cover the basics of budgeting, savings, social security and retirement in a regular segment?
- Talk with a financial manager about questions to ask your partner to get up-to-speed on your finances.
- What is the most important information to be sure is accessible to both partners?
- How can older couples start making financial decisions together now, rather than relying on one partner?
- Find and share financial literacy resources couples can use together to enhance both their financial knowledge. What are some financial milestones couples should anticipate?
- Money can be a source of conflict for couples. Can you talk to a relationship expert about how couples can reduce the stress that often comes with financial discussions?
- Talk to a financial adviser about how couples just combining their finances can work together to manage their money.
- What financial decisions should be made together?
- How should financial information be stored such that bother partners have access?
Finally, though not mentioned in the study, segregating financial responsibility can, in extreme cases, be an indicator of bigger problems in a relationship, a story we’ll examine in a future Money Matters.
Try this story idea, one from our growing list or your own and submit it for a chance to cash in yourself!
Weekly Money Matters personal finance content for your newsroom is sponsored by the National Endowment for Financial Education.