It's no surprise that money is a leading cause of divorce, but it may be an even bigger issue than previously thought and financial issues in divorce are becoming more complex than ever.
It’s no surprise that money is a leading cause of divorce, but it may be an even bigger issue than previously thought.
In August, the Institute for Divorce Financial Analysts (IDFA) surveyed nearly 200 Certified Divorce Financial Analysts (CFDA) and found that in 22% of instances, money was the main reason for a divorce. This was only the third-most cited issue, following infidelity/sexual issues and basic incompatibility.
However, a Rhode Island divorce planning firm believes that 22% may be underselling how big of a factor money can be as a main cause of divorce. In particular, they cite the cause “incompatibility” as a reason listed by the CFDAs in the survey.
“Incompatibility is too general of a category,” states Susan Dewsnap, CFP, CFDA, founder of Equitable Divorce Solutions, said in a statement. “People can be incompatible for many reasons, but in our experience, differences in spending habits, savings goals, attitudes toward debt and risk and other financial subjects that are central to a family’s finances can really put a strain on a marriage and are often a major cause of divorce.”
IDFA did mention that “basic compatibility” was usually a result of other issues like an emotional, physical or financial breach of trust. And so it’s very possible that money issues are responsible for divorces more than just 22% of the time.
“As divorce planners, we often see the money issues emerge in divorce negotiation meetings, where emotions are often raw and conflicts are just simmering below the surface, ready to burst out,” Kevin Worthley, CFP, CFDA, with Equitable Divorce Solutions, said in a statement. “If money problems are a cause of their conflict, it doesn’t take much in the discussion to bring these topics out.”
Financial issues aren’t just confined to simple monthly spending and saving. According to Jeffrey A. Landers, CFDA, divorces are now much more financially complicated than a decade ago.
“Today, it’s not unusual for marital assets to include residential and commercial real estate, sophisticated financial investments, complex employee compensation packages, and closely-held businesses or professional practices,” he said in a statement.