Finance is the Biggest Reason for Divorce: How To Transcend The Pitfalls

We all go into new relationships with a great sense of optimism. The hormones and neurotransmitters associated with falling in love carry us on a wave of bonhomie or ‘she’ll be right mate’, to put it in the Australian vernacular. We think ourselves bullet proof to the normal suspicions and fears of things going wrong and our partner letting us down. Love has entered the building and nothing on earth matters as much as these feelings in this moment. Old hands may try and warn us of potential trouble ahead but who wants to listen to such jaded human beings at a time like this? Mum and dad are past it, their biological clocks have ticked over into red time. Now is the era of the young at heart and our love will last forever.

But when the happiness fades, predominantly it is women who suffer the most from bad financial outcomes from their relationships when they end.

“We think ourselves bullet proof in love! But love and money have a way of tearing us apart.”

Love & Money Matters in Divorce

Love hardly ever lasts the distance in human relationship terms, whereas financial assets and reputations do. Maybe accountants make poor romantics, as they rarely see beyond the bottom line. Yet finance is often the biggest reason for divorce - and in the final fallout, mutual assets get weighed in strictly accounting terms. The decision to enter into a no-holds-barred financial union with your partner has plenty of consequences for your future. Shared bank accounts, shared property, and paper-thin walls of financial propriety between couples are all defining issues. Statistical research figures in Australia indicate that 1 in 5 couples under 30 admit stealing money from their partner’s purse or wallet without first gaining consent (Canstar, 2019). Relationships NSW address the powerful role that love and money play in relationship breakdowns for Australian couples that they see via their counselling programmes. The Australian Institute of Family Studies in their paper Towards understanding the reasons for divorce by Ilene Wolcott and Jody Hughes state:

“individuals often take an ‘inventory’ of the advantages and disadvantages to marital dissolution. These costs and benefits may be both psychological and social in origin.”

The piper must be paid in the end, whatever the nature of the story. All good things come to an end and plenty of bad things too. We live in a constantly changing society, especially in relation to gender equity. The recent intense focus on sexual abuse and harassment in federal parliament has seen a spotlight put on this within Australian society more generally. Sex Discrimination Commissioner Kate Jenkins carried out a review, which found 1 in 3 staff experienced bullying, sexual harassment, or sexual assault in Commonwealth parliamentary workplaces. This is an extraordinary figure in a modern wealthy nation like Australia in 2022. What this says about relationships, with those committing the acts, often, in existing relationships and the impact it has on the victims within their own relationships is shocking.?

“The course of true love never did run smooth.” (Shakespeare, A Midsummer Night’s Dream)

William Shakespeare knew this, and I think most of us know this too. Therefore, the odds of you ending up in some financial bother due to your financial intimacy are pretty high.

Everyone begins with the best of intentions, but things soon degenerate into squalor. Balance sheets rarely are as stained as bed sheets, in my experience. In other words, your contractual commitments to shared property and assets remain, even, when your heart and body have been playing away from home. Material possessions and money bind couples financially together despite the failings of their marriage or relationship. This can have grave impacts upon each individual’s credit rating. Indeed, nasty break-ups can have terrible consequences for individuals long after the broken China has been swept away. People do crazy horrible things when they are hurt, angry, and feeling betrayed by their lovers.?

Why Do Shared Finances Often End Up in Divorce?

Ok you have fallen in love (why is it a fall? There might be a clue in the language) and you want to share everything with your soul mate. The benefits of shared finances on a psychological level are obvious, with no need to hide anything and being truly yourself inside the union. This empowers the relationship and your identity as a couple going forward. On a financial basis becoming a unit can reduce the expense of doubling up on everything. Joint accounts mean less bank fees and charges. Shared credit cards provide less fees again and a means to check up on each other in terms of spending behaviours. Shared tenancy agreements and finance contracts mean that you are moving toward shared goals and targets more efficiently. Purchasing a home together places this, the largest investment of most people’s lives, on an equal footing between both parties. Insurance policies and wills will need to be updated into coupledom status. Superannuation is another area where the beneficiary may need to be amended in line with your relationship status. When things are going well in the relationship shared finances are a boon. However, love and money have a way of falling out of kilter with one another. Individuals must continually subsume their separate desires into shared goals. If money becomes tight through one partner losing their job or unforeseen and unavoidable expenses mount up this can put pressure on the relationship. The vicissitudes of life can tear away at the individuals within a financial union and eventually end in divorce. Having children can unmoor some couples from their previously secure status as a couple. Parenthood provides great blessings and great stresses upon individuals within relationships. Many couples do not survive the transmutation into parenthood status. Remember that finance is the biggest reason for divorce: How to transcend the pitfalls is, sometimes, a steep climb to navigate.

What Are the Risks of Financial Damage Resulting in Divorce?

When you open your heart to another and let him or her have access to your deepest deposits it can ultimately be a diminishing experience. Resulting in withdrawals of the most damaging kind. Love and money rarely make for durable bedfellows in my experience. Once you have all these shared financial commitments in place they can be at risk of damage during relationship breakdowns and divorce. Suddenly, there are two distinct measures in place in regard to the health of your marriage or relationship. There is the fluid every day one involving your feelings, thoughts, and behaviours. However, there is another barometer in place, which is your shared finances and assets. This unflinching guide locks you into a fixed position until it is dissolved via death or divorce. I would advise you to never forget that finance is the biggest reason for divorce: How to transcend the pitfalls is a major challenge in itself.

Financial Abuse?

Financial abuse is now being classified as a form of family violence. One partner, usually the male, controlling the purse strings is all about having power over the other partner. Not being included in financial decision-making and withholding money are the hallmarks of this form of coercive control. In many instances, the decision to form a union and commit to shared finances results in one person taking control over the other. Once an individual no longer has access to their own money they are vulnerable to this misuse of power.

Traditionally the male went out to work and the wife stayed home to look after the family. This structure lends itself to this kind of coercive control and manipulation of financial intimacy to the benefit of one over the other. The breakdown of the relationship can result in the victim of this financial abuse leaving the marriage with nothing. The partner, who stays at home, can be a virtual prisoner of the relationship with no access to funds if she or he wants to leave. Examples of this financial abuse behaviour can include:

? Establishing control over someone’ finances – being the boss of the money & paying the other an allowance.

? Making all the financial decisions in the relationship.

? Taking out loans in the name of the other partner.

? Forcing the other partner to claim social security benefits.

? Filing fraudulent claims re-insurance.

? Selling their possessions without permission.

? Taking moneys from a person’s pension.

? Getting the other to take out a second credit card.

There are further instances of this kind of financial abuse, which can damage the credit rating of the individual being victimised. Many people who emerge out of these marriages and relationships carrying long term negative listings on their credit rating files. This, of course, makes the job or re-establishing their lives so much harder going forward. I wrote this article on International Women’s Day because I consider it to be an important topic.

Some good news is that, even if you?have been a victim of financial abuse and fraudulent financial activity there are avenues open to repairing your credit rating file. Lawyers specialising in this area are available to assist with credit repair through the credit reporting law in Australia. You can explore, with us, on a no-win-no-fee basis, having these fraudulent negative listings removed from your file.?

Relationship Fraud in Australia

The Internet has seen the rise of new levels of crimes committed upon Australians through fraud and relationship fraud in particular. Human loneliness and its concomitant desire for intimacy via relationship makes many individuals vulnerable to exploitation by nefarious agencies. I always say, if something appears to be good to be true it usually is. However, whether it is due to alcohol consumption or mere desperation people make poor decisions in regard to trusting someone they have never actually met in the flesh but over the Internet. Most of us are unaware how much of a role body language plays in communicating a lot of intangibles like trust. The absence of this ‘bullshit sensor’ can leave us blind to fraudulent activity. It is difficult for an Australian living in comfortable circumstances to imagine the lengths that these criminals will go to to pull the wool over the eyes of a potential target. Fake photos are employed and fake social media pages on platforms like Facebook, Linked In, Instagram, and more. The criminals have done research on their intended mark in Australia by checking out their social media pages to gather information. The targeted person believes the words they read coming from this fraudulent identity. Their desperation for love makes them gullible. There are instances of Australians having borrowed many thousands of dollars to send to the internet identity they think is someone who loves them and needs their help. Often it is for supposed airfares so that they can come and be with their true love. Invariably they never turn up and never had any intention of doing so.?

The Australian Institute of Criminology research report into Online fraud victimisation in Australia: Risks and protective factors, shows around 13% of online fraud victims were victims of relationship fraud via online dating sites. Australians were scammed to the tune of $851 million in 2020, according to the Australian Competition & Consumer Commission (ACCC) Targeting Scams Report. $28.6 million via dating and romance scams. $4.3 million via identity theft. By gender 85, 489 reports were filed by women and 78, 551 by men. More women were scammed via romance and dating fraud. Love and money are expensive bedfellows even over long distances it seems. Virtual romance is a pricey and very unsatisfying game to play.

Whether you are starting a new relationship or in the midst of an ongoing marriage it is prudent to examine your financial vulnerability in light of the likelihood of the demise of the union. It may seem pessimistic to see dark clouds ahead but in life it pays to think like a lawyer. Always ask yourself what happens in the worst case scenario? How will I be placed if this all falls apart? The somewhat sad truth is that we all end up alone eventually if you think about death. Preparing yourself financially is the smart move that more individuals, and women in particular, are making in 2022. There are legal experts who can remove fraudulently derived bad credit ratings on your credit file, but why leave yourself open to this in the first place?

References

Australian Human Rights Commission, Set the Standard, https://humanrights.gov.au/about/news/sex-discrimination-commissioner-kate-jenkins-launches-set-standard viewed 3rd March 2022.

Australian Institute of Criminology, Online fraud victimisation in Australia: Risks and protective factors, https://www.aic.gov.au/publications/rr/rr16 viewed 6th March 2022.

Australian Institute of Family Studies, https://aifs.gov.au/facts-and-figures/divorces-australia viewed 4th March 2022.

Do couples separate because of financial difficulties- Yes and No, https://www.relationshipsnsw.org.au/do-couples-separate-because-of-financial-difficulties-yes-and-no/ viewed 3rd March 2022.

January 2019: Finances and Relationships, https://relationships.org.au/document/january-2019-finances-and-relationships/ viewed 4th March 2022.

What is financial abuse? - https://www.wire.org.au/financial-abuse/