Why You SHOULDN'T Learn How to Protect Yourself Financially From Your Spouse
Learning to protect yourself financially from your spouse may seem like an important step in a healthy marriage, but that isn't necessarily true. Let's shift that mindset.
Instead, emphasize promoting peace and harmony in your marriage, and you can trust that the financial pieces will come together. Fighting over money is normal, but it doesn't have to be a major issue when you learn how to handle each other with care.
Healthy Relationships Breed Financial Harmony
When you have a healthy relationship, it naturally creates financial harmony. When you're on the same page, you can make mutually beneficial decisions and want to include one another in decisions about your financial future.
Rather than arguing about money all the time or making one spouse feel like they have to be solely responsible for the finances, making decisions together can create a more fulfilling relationship that naturally leads to a better financial life.
Signs of Financial Disconnect
Financial disconnect can lead to financial issues, but when you recognize the signs, you can address and fix them, getting your relationship and finances back on solid ground.
Here are some habits (of your significant other) you might find that could jeopardize your financial safety:
Hiding important financial documents
Opening new accounts but hiding them from you
Maxing out credit cards
How to Protect Yourself Financially From Your Spouse
If you notice your finances in marriage aren't as stable as you'd like, or you notice red flags that your partner isn't taking your financial planning as seriously as you are, consider these ways to protect the relationship from problematic financial behavior and habits.
Discuss Financial Goals
It's best if you and your spouse are on the same page with your financial goals. You may come to the relationship with different goals, but as you grow together and become more in sync, you'll have some of the same goals.
Prioritize your goals, and find ways to meet them. Assess both partners' spending habits, and decide how you'll handle the bank accounts so that you can reach your financial goals.
Have Regular Financial Check-Ins
There's nothing wrong with having 'money dates.' Make it a regular occurrence each month to talk with one another about your financial status, what went right, and what you may need to change.
Just like at work, you receive feedback on what you could do better, and this is the same thing. Avoid pointing fingers or accusing; instead, check in with one another and give each partner time to discuss their thoughts and opinions.
Keep Financial Records
There's nothing more telling than the financial records you receive. If you don't know where the money went in your joint account or want to reconcile finances because you have separate accounts, having access to your financial records will make it much easier.
Having financial records also gives you something to look back on so you can review what you should change or acknowledge what successes to be proud of. Growth starts with identifying where you are so that you can see how to best create the future you want to have.
Identify and Document Assets
In marriage, you'll accumulate assets that you must track. Keep track of your assets as you learn how to protect yourself financially from your spouse (and with your spouse). Whether you are having relationship troubles or everything is as it should be, having a careful record of your assets is important for taxes, financial planning, and estate planning.
The more careful records you have, the easier it is to see where you stand and what you might need to change to reach your financial goals.
Monitor Joint Accounts
Give both partners access to your joint accounts. Instead of one person being in charge of the finances in a marriage, let both partners take responsibility. This allows both partners to see what's happening in the accounts and address any issues instantly.
This eliminates the risk of not being aware of any financial issues you might have. While it might cause some strain to bring these issues up, it's a lot easier to do the moment it happens rather than after the fact when the other person might feel blindsided.
Check Your Credit Report Often
Everyone gets free weekly access to their credit reports. Use this to your advantage, and check your credit reports often. I suggest pulling them monthly or at least every couple of months. Then, if you notice new accounts or activity on there that you weren't aware of, you can discuss it with your spouse and decide how to proceed.
Spousal support (as in having the support of your significant other/spouse, not the payments sometimes owed after a divorce) is imperative when dealing with finances and marriage. You want to feel like you're cohesive but also independent. Checking your credit reports is just a way to ensure nothing is happening that you didn't know.
Acquire Liquid Assets
Having liquid assets is very beneficial. They can be converted into cash easily and quickly without significantly affecting their value. Liquid assets include checking, savings, stocks, bonds, and other assets you can sell quickly if you need cash.
In the event of an emergency, like losing a job or an unexpected medical cost, liquid assets can help cover the necessary expenses. They can also be a great way to keep your money safe from inflation, ensuring that your money grows at a reasonable rate and isn't losing its purchasing power over time.
Shift Financial Responsibilities
To financially protect yourself, give both spouses financial responsibility. You can each take a job or share all tasks. If you find one partner burning out from one task, consider switching so both spouses can feel what it's like to be in the other person's shoes.
If one, or both, of you are struggling with the weight of your financial responsibilities, consider speaking with a financial advisor or certified financial planner who can help you strategize and prioritize.
Seek Financial Couples Counseling
If you find you and your spouse can't agree on how to handle finances in a relationship or you've noticed red flags that make you wonder how to protect yourself financially from your spouse, consider financial couples counseling.
With this type of counseling, you take steps to protect yourself and your marriage. Together, you'll work on creating peace and harmony in the marriage and your financial life.
Financial Planning If Divorce Is on the Horizon
If you cannot work out your differences with your spouse and are considering divorce, there are certain protections you should take to protect yourself financially.
Refer to Prenuptial/Postnuptial Agreements
If you drew up a prenuptial agreement, or even drafted one during the marriage, refer to it to determine how you'll split the assets. Maybe you had assets each spouse brought to the marriage that you're keeping separate, or there were other nuances you agreed to before getting married. The legal document will help direct the divorce proceedings, making the divorce more amicable.
Avoid Comingling Assets You Wouldn't Want Shared
When you feel divorce is imminent, you should avoid comingling any assets you want to keep separate. For example, if you receive an inheritance, don't put the funds into a joint account or use them for anything your spouse may benefit from because they may, at least in the eyes of the court, become part of the marital assets, and you will have to share them in the divorce.
Think Big Picture
When you're thinking about divorce, think about your future. What will it look like financially? Don't focus on the little details now, but on how you'll protect yourself financially moving forward.
Seek Legal Counsel
Don't go through divorce proceedings without legal counsel. Consider having separate attorneys so that both spouses' rights and interests are fairly protected. Of course, having two attorneys will cost more money, but you'll be glad you did in the end.
FAQs
How Is Money Split in a Divorce?
Most states split money fairly, or what the judge considers fair considering your circumstances. However, if you live in one of the nine community property states, the judge will likely split your money 50/50 despite any circumstances you bring up.
Does a Prenup Protect Future Assets?
A prenuptial agreement typically protects current assets, but when written correctly, it can also protect future assets, such as an inheritance you know you'll receive at some point in the future.
What Is the Best Way to Hide Money Legally?
The easiest way to hide money legally from a spouse is to have a separate bank account. You can also invest in separate assets or rent a safe deposit box to keep money in it and away from your spouse.
Is My Spouse Entitled to My Inheritance?
If you receive an inheritance during marriage and use the funds for the greater good of both spouses, your spouse may be entitled to some of it. However, if you keep it stored as completely separate property from your spouse and don't comingle the funds, they may not be entitled to any of it.
The Bottom Line
You shouldn't feel like you have to financially protect yourself in marriage. Instead, you should be on the same page as your partner and making decisions together. Your finances are an important part of your marriage, but it's also not the foundation of your love for one another.
When you learn how to interact with one another and make decisions that benefit both of you, it's much easier to meet your financial goals.
Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!
Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.
Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.
Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.
