How couples can avoid fights over finances

In 2012, researchers at the Kansas State University investigated the relationship between financial issues and divorce. They followed 4574 married couples for more than 10 years to examine how financial well-being and financial disagreements affected their chances of divorce.

They found out that fights over financial issues was the top predictor of divorce, having a greater effect compared to parenting stresses, sex, and even relationships with in-law parents. In addition, fights over financial issues tended to have a deep and long lasting impact than fights over other issues. Arguments over money increase the chances of divorce regardless of how much individuals made, or the value of their assets.

In Singapore, the divorce rate has been increasing steadily. 84 per cent of couples who married in 2003 remained married 10 years later in 2013. In comparison, 91 per cent of couples who married in 1987 remained married 10 years later in 1997.

The effects of divorce are well documented. Compared to adults in a stable marriage, divorced adults are less happy, more susceptible to depression, and more likely to suffer from serious illness.

If the terms of divorce are not peacefully settled, lawyers may be involved, resulting in large legal fees. Assets may also have to be split, affecting the standard of living of divorcing individuals. Divorce hits women especially hard - in the United States, about 1 in 5 women descend into poverty as a result of divorce.

How then, can we avoid fights over the family finances? We offer four ways: communication, transparency, understanding your spouse's money personality, and understanding your spouses' history.


Couples need to clearly communicate their financial goals and priorities to make sure that resources are being properly allocated and planned for. For example, are children desired? If so, both parties in the relationship need to commit to setting aside funds for however many number of children that are planned.

Couples also need to ask each other important questions such as: where do we see ourselves financially in 5-10 years time, what kind of lifestyle will we have, and when do we plan to retire?

Communication on big-ticket items, such as property and cars, is especially important. For example, if a couple wishes to upgrade to a condominium or landed property in the future, a financial plan needs to be set in place. This requires clear communication of financial commitment and responsibilities from both parties.

Both parties need to have a clear idea of how much they need to save, and by when a savings amount needs to be reached. Couples should set a recurring date to communicate about finances, and make sure that financial goals and priorities previously set are still realistic.

9 money mistakes married couples make

  • Couples should talk about where they got their financial values from to better understand each other's attitude toward spending.
  • Financial disagreements often result from not understanding each other's values. For instance, Sally grew up the youngest of 12 children and was always told to wear hand-me-downs. As a result, she feels happy every time she gets a new dress. While it is not right to spend excessively, her husband can work towards communicating a financial understanding with her by knowing her money story.
  • Couples may avoid any form of financial discussions because they are afraid it could lead to a fight. However, pretending the issues doesn't exist will not make it go away.
  • Couples should seek financial advice together, and make it a point to discuss their mortgage, expenditure, insurance, loans, savings and other financial concerns regularly.
  • Money troubles and a bad credit history cannot be kept secret for long. The truth will eventually come out if you are living together with your spouse and making joint plans for the future such as housing or car loans.
  • the relationship will turn sour when money secrets are brought to light simply because there has been a loss of trust between two parties.
    Always be open and frank about debts or loan issues you are facing. The couple should work together to address these issues, instead of keeping secrets from one another.
  • When you start a new life together, it is important that you both talk about how much you expect to spend and contribute every month. Set aside a certain amount for expenses, and discuss if there are any exceptions to the rules you set.
  • Most importantly, stick to the budget and rules you set. Each person has to help the other stick to the budget because it surely isn't easy to stick to tight routines month after month. Make sure the burden distribution is equal as well, to avoid any cause for argument. Just remember to keep your financial goals clearly set so achieving them will be made easier.
  • So you're both bringing in a fair amount of money to the household each month, but are you factoring retirement into your finances? You may be able to sustain your standard of living with the current income, but if you want to maintain it in old age, you will have to think of ways to finance your expenses when you're no longer working.
  • As a couple, you should talk about your career plans and share your thoughts on retirement with each other. At what age would you like to semi-retire? What will you standard of living be when you stop working? Will you have a car even when you're much older?

    It's good to start thinking about your golden years so that you can actually enjoy it by the time you get there. Some couples make the mistake of planning to pay for their children's education, but neglect their own retirement completely.
  • Most couples would have already discussed the possibility of having children before they got married. Your choice will affect the way you set your budget and the way you save money significantly.

    If your combined income is not very high and you wish to have children, you must speak with your spouse about adjusting your standard of living so you can accommodate one more mouth to feed in the house.
  • Also, will you be a single or dual-income family after children arrive? How much should you set aside for your child's education and healthcare needs?
  • Taxes play a big part when it comes to expenses, so part of figuring out your married finances is also figuring out how you and your spouse will pay for taxes.
  • Make a systematic plan to ensure your taxes are paid for promptly, so that you are ready to do so when it is time to file taxes.
  • If both parties are concerned about keeping up an appearance, they could end up overspending on things that don't matter from luxury cars to property or fine dining.
  • It is always important to remember that your relationship and family come first in your marriage. Set goals that are family-centric to prevent yourself from going overboard in your chase for a better lifestyle.
  • Newly weds might not like to discuss death and illness but the reality is that you are not invincible. Make sure you have an emergency plan to cover your financial needs in case one person falls ill or passes on first.
  • Such plans range from having a will, buying home and health insurance policies, and also diversifying your income.


In order to avoid money disputes, couples should be as mutually transparent as possible about significant expenditures. Conspicuous consumption is common in Singapore - women enjoy purchasing luxury handbags, and men enjoy purchasing expensive timepieces. Couples need to make sure their significant other is made aware of large expenditures, so that trust in the relationship is preserved.

Debt is another item that couples need to be transparent about in a relationship. If a spouse runs up significant bills on a credit card, his or her significant other should be informed. That being said, not all debt is created equal. Debt from graduate school fees is not the same as credit card debt.

Understand your spouse's money personality

Is your spouse a spender or saver? Opposites attract, and savers often find themselves married to spenders. Spenders prefer to dine out, while savers prefer to eat at home. Spenders may also prefer to spend money on status enhancing items, while savers prefer security.

Understanding your spouse's money personality can make it easier to reach a financial common ground. If you know how your partner feels about a situation, differences in money personalities can become less polarised.

Understand your spouse's history

Mr Daniel Tay, a fee-based financial consultant, writes about Jane (not her real name), whose father gambled. Jane's father frequently borrowed from family members including Jane, to fuel his gambling addiction. Jane loved her father very much, and so did not refuse him whenever he approached.

Jane didn't like lending her father money to gamble though, so she developed a habit of spending all her money.

By understanding your spouse's family history, you can gain a deeper understanding of the factors that drive your spouse's spending habits. Such insights can be helpful in bridging the gap during discussions on family finances.

Mr Tay says that "to avoid issues about money, it is imperative that the couple communicate deeply with each other about their feelings about money. Each person must also listen to their partner without passing judgement on them and allow their partner to feel loved and accepted."

When this is done properly, "the problems about money tend to disappear", he adds.

5 money traps couples fall into when buying their first property

  • Thanks to the government's slew of cooling measures, among which are capping MSR at 30 per cent for HDB flats and TDSR at 60 per cent for all properties, you should find yourself unable to seriously overextend yourself even if you are tempted to.
  • - Staying home to look after children may potentially half your income. - Interest rates are at rock bottom currently but they will most definitely go up. - Property prices are not at fire sale prices.
  • The ABSD will not last forever, but your property may (especially if it is freehold). One must remember they are one of a set of cooling measures to rein in property prices and keep them affordable for first-time property buyers.
  • However, if property prices were to start tanking significantly, it is likely that the current measures, including ABSD, will be relaxed layer by layer, like peeling an onion. After all, it is to no one's benefit for the single largest asset owned by most of us to depreciate.
  • Refinancing later on comes with many risks, including the interest rate environment then, your employment situation then, the state of the economy and property market then (affecting the valuation of your homes) and government/banking policies then (which affect whether legal subsidies can be given by banks).
  • Even if the initial rates are 0.1 per cent higher than the other bank's, what you'd want to ensure is that the rates after the initial years are competitive, in case you are unable to refinance to your advantage when the lock-in period is over.
  • It may be tempting to buy a 500 or 600+ sq ft condominium unit at less than S$1million, especially for professionals or HDB dwellers looking to buy an investment unit.
  • Do keep in mind the thousands of units coming into the market over the next few years, which means that it may not be easy to rent out or sell your unit at a profitable price. This while it locks up your 'quota' for property ownership with ABSD and punitive financing quantums for subsequent property purchases.
  • An old property on a 99-year lease is simply what it is, an old property with a shorter life span. One should always assume that the value of the property will be zero at the end of the lease and ask ourselves if we are comfortable paying the amount for the remaining lease.
  • If you are contemplating marriage and buying your first property in the foreseeable future, it is good to use the above as a checklist to have the necessary discussions with your significant other before making the largest purchase of your life. helps you with your personal finance issues -- ask them a question anonymously, or connect with a financial consultant.