Who manages the money in a relationship?

Common wisdom tells us that the partner who is most knowledgeable about money becomes the  money manager. Sounds logical.
But that's not what researchers Adrian Ward and John G. Lynch both psychologists and marketing professors found.
Examining 313 couples early in their relationship, they asked about financial literacy, credit score, income, and time spent on household work. They found NO correlation between financial abilities and who became the household chief financial officer (CFO). They found that the person who had more time and hated the task less was the one who took the responsibility.
In another larger study the researchers found that after 5 years the financial CFO develop significant financial literacy while the non-CFO deteriorated in their financial skills.

Other researchers have found that people develop financial expertise on a "need to know" basis more readily than through a formal course.

Many marriages of long duration end in widowhood or divorce, often leaving the less knowledgeable partner wishing they knew more about the couple's finances.

Source: "Deciding who becomes the CFO of the home" by katy McLaughlin, WSJ,4/10/10.

Till College Debt do We Part

"Marriage can change everything for couples-- in some cases even their student-loan payments" writes Cheryl Munk for The Wall Street Journal. 

The media has educated us about the high costs of attending college and the massive student debt load facing many millenials and their parents. Often house buying, procreation and investing for retirement are delayed as couples struggle to pay off student loans while earning less than stellar incomes in a high cost housing market.

Munk writes that "marriage also can trigger changes to one or both partners' actual student-loan payments and loan-related tax breaks."Specifically:

Marriage might make one ineligible for income-based repayment plans, depending on the couple's income or might raise the required payment.
Use this tool to determine the impact of marriage: https://studentloans.gov/myDirectLoan/repaymentestimator.action
Think twice or three times and consult a tax professional if you are contemplating filing taxes separately when married. The implications and consequences are numerous.

Student debt taken on after marriage presents potential complications.
In community property states if one spouse defaults, creditors may pursue the other spouse for repayment.
In the event of divorce, complications arise if one spouse co-signed for the debts of the other spouse. The co-signing spouse is legally responsible to repay if the former spouse defaults.

Defaulting on a federal loan can result in wage garnishment, withholding of federal income tax refunds, and destroy the defaulting spouse's credit score. A default by one spouse can ruin a couple's chance of getting approved for a home mortgage.

Of course, no one expects any of the above to happen to them...

Want to buy happiness?

Ross Menke's five strategies:
1. Help others,
2. don't let special treats become routine,
3. favor experiences over possessions,
4. hire others to do chores you hate, and
5. pay now but consume later.
Read Jonathan Clements' advice at https://humbledollar.com/2019/01/spending-happily/

Should newlyweds have joint financial accounts?

I used to tell my students that they should share credit reports with any partner they are considering marrying or entering into a long-term relationship. With vehicle and student loan debt so high, you don't want to be surprised when your financial plans are upended by a spouse's high debt or bad credit. Whether a first or subsequent marriage, share financial information before you get hitched.  Learn more at: https://www.thestreet.com/story/13743987/1/how-marriage-can-fix-your-terrible-credit.html

18 Financial Tools to Make Your Marriage a Success

The actual title of this article is: 18 Financial Tools to Make Your Second Marriage a Success (by Gary Forman in USN&WR) but almost all of it applies to first marriages as well as intimate partnerships. How many of these 18 rules are you following? The article is a great financial discussion starter for engaged couples and newly weds as well as couples with more experience. Especially for those contemplating merging their finances, it is absolutely critical for full disclosure on how much debt you are bringing to the union and your credit history. http://money.usnews.com/money/blogs/my-money/2012/11/08/18-financial-tools-to-make-your-second-marriage-a-success