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Financially risky choices affect decisions to divorce

On Behalf of | Aug 10, 2021 | Divorce

Several studies in recent years have found that disputes over money and financial issues are directly linked to divorce, and are often cited as one of the primary reasons for this decision. Money has ties to many other aspects of one’s life, and when parties do not have similar financial views and priorities, it can be a significant source of stress.

Attitude is everything – especially regarding money

A new study from the University of California San Diego indicates that a couple’s differing “risk preferences” are at the center of financial disputes that can lead couples to divorce. What exactly does that mean?

Put simply, “risk preferences” refer to each spouse’s attitude toward spending and investing money – or the risk of doing so. For example:

  • One spouse who invests in stocks and works the stock market v. one who does not
  • One spouse who wishes to renovate their home and increase the property value v. one who would rather not
  • One spouse who wishes to invest in a passive income opportunity v. one who would rather save money

Opposite attitudes towards these investments, which involve some level of risk, can often lead to disagreements and increasing tension in a marriage. The study found that these opposing views are frequently “a root cause” of separation and divorce.

Financial arguments do not automatically mean divorce

Money is not a small argument. However, simply because spouses argue over money does not mean they will divorce. Money is usually not the only factor contributing to the end of a marriage. Every relationship is unique, and there are several elements that lead to a divorce. Finances can be a serious point of stress for individuals, and this stress can increase during the course of a marriage.

That stress only compounds when North Carolina couples combine their finances after marriage. Sharing finances and marital property can become a source of daily tension if spouses have different “risk preferences.”

This is why these differences are so often at the center of a divorce. That is also why being aware of the different perspectives regarding money – and how they can affect a relationship – is critical.