The Finances of Marriage

Ben Wilson (0:00)

A tightwad is not someone who doesn't get a lot of pleasure from spending. It's someone who deep down wishes they could get more pleasure from spending than they're actually getting.

Benjamin Felix (0:11)

Couples who experience the lowest divorce rates spent less than $1,000 on their wedding.

Dan Bortolotti (0:16)

My wife will tell you a funny story that I went and stole the ring from her parents' house.

Benjamin Felix (0:22)

That's pretty funny.

Welcome to Episode 426 of The Rational Reminder Podcast. We are hosted by me, Benjamin Felix, Dan Bortolotti and Ben Wilson, all of PWL Capital. Be back with you.

Dan Bortolotti (0:38)

Yeah, looking forward to it.

Benjamin Felix (0:40)

Could be back. So we're going to jump right into our main topic here, which is the finances of marriage or the personal finances of marriage, or maybe the interpersonal finances of marriage, I don't know. There's a bunch of interesting research on this that we'll talk through, and then stick around at the end. We will put together a little after show.

Some comments in the Rational Reminder Community recently suggested that people miss the chatter that I guess we used to do more of.

Ben Wilson (1:05)

We'll have to do more of it.

Benjamin Felix (1:06)

I think so. I think that's the message.

Okay. So who you married? I'll be interested in your commentary, Dan and Ben, as we go through this, because we are all married people. How long have you been married?

Dan Bortolotti (1:23)

Actually 15 years on Thursday. Anniversary is this week.

Ben Wilson (1:27)

I'm 32 this year.

Benjamin Felix (1:29)

Man. Yeah. Okay. So I've been married 12 years, which I thought was a long time, but definitely interested in your input as we go even more so. Who you marry is obviously one of the most impactful decisions of your life, both financially and of course otherwise. But I think a lot of couples let their finances be an afterthought or their financial compatibility be an afterthought. But the reality is that who you decide to marry and how you structure your finances and make decisions together compounds across every major life decision that you make going forward.

I don't think anybody would disagree with this statement. If you mess up the marriage thing, the costs can be pretty devastating, both financially. Divorce can be very expensive, but obviously otherwise as well, emotionally and psychologically and all that stuff.

I'm not a marriage counselor or an expert in marriage. You guys are more so than I am with other more years of experience, I guess. But there is a ton of research on this topic, which is what we're going to be speaking to. We've also got, and again, this is where I'll be interested in your guys' thoughts as we go through this, Dan and Ben. We deal with a lot of clients, a lot of Canadian households, and a lot of households are couples. They're married. And then the other unfortunate thing that we see in our role as financial advisors is people do get divorced. We get a pretty good cross-section of couples and finances just through our professional work. And the last thing I'll say as a setup for the topic is that the Harvard Study of Adult Development, which is one of the longest running studies of human happiness, a psychiatrist wrote a book based on those data. And one of the six factors of a healthy aging, this psychiatrist found was a stable marriage. I think it's something that's really worth getting right and doing well. And there's a bunch of research on how to do that, which is what we're going to talk about.

Any comments before I keep going?

Dan Bortolotti (3:18)

I think it's a super interesting topic and obviously, finances is a part of what you interact with in a marriage. It's usually not a primary consideration, but it's probably at least a secondary consideration when you're in the courting, dating phase, you notice things.

It may not be the reason you go forward or stop a relationship, but it's definitely something that people notice. And especially if you got together young, it may be hard to recognize what impact they might have over a long term. So it's important to think about that, especially if you're not at that stage yet, or if you've been burned once through a divorce, finances might have been one of the reasons that led to divorce. And it probably changes your perspective on how to approach a future relationship.

Ben Wilson (4:06)

I think that's it. You know, most people make this decision when they're quite young, unless it's a second marriage.

But usually when you are deciding on a partner that you want to spend your life with, you're probably not at the same financial position then that you will be at some point in the future. And it's often difficult to really know what you're getting yourself into on that. And hopefully, you know, as a couple, you evolve over time in the same way. In other words, you don't become more different and more extreme over time, that you kind of learn together your financial situation, changes together at the same pace, and you can both update your expectations along the way.