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Friday, April 19, 2024

College 101: Taken The Wrong Way

I was recently at home in New Jersey over the holidays and had a bizarre exchange with my dad. We were driving to the grocery store one morning when--on the Todd & Jane Radio Show--there were announcements of real estate growth in areas near our home. My dad chuckled and said we should get ready for more divorce filings now that the economy is booming. I didn’t get it, so he explained that there was a correlation.

I’ve never heard of that. In fact, I would have assumed the opposite. Wouldn’t couples be happier with more value in their real estate?

Your dad is definitely right about the correlation. According to attorneys at Tubman Law, financial troubles can cause stressors in otherwise healthy marital relationships. Whether or not increasing real estate value is a blessing or a curse on a marriage is a matter of perspective. The answer depends on the state of affairs preceding and during the financial struggles.

Certainly, you’ve at least heard that money problems can lead to divorce. It doesn’t take much imagination to foresee the different scenarios that might undermine the relationship: for instance, spending shared funds on superfluous things without approval. Worse still might be spending a spouse’s funds without permission. The absolute worse is when the spending impacts the lives of children.

That’s why researchers at North Carolina State University claim that financial harmony is a key component of successful marriage. Unfortunately, as the statistics demonstrate, many people struggle to achieve financial stability throughout life (and avoid admitting it because of the shame). If an individual doesn’t become independently financially responsible before he or she enters a relationship with someone else, the risk of money problems is much higher. If both individuals struggle financially and fail to structure the relationship to openly address the mutual problem, then you can almost be sure of disaster.

It’s possible that The Great Recession could both stress marriages and simultaneously prevent the individuals from withdrawing from them. Divorce is a costly endeavor. There’s the emotional and psychological toll. And then there are the financial expenditures on legal fees, etc. You’d need an expert attorney well-versed in probate and estate litigation, and the proceedings wouldn’t necessarily be quick. The outcomes aren’t always guaranteed to be as favorable as people expect. That changes the calculus behind their decision-making.

Assuming a withered marriage managed to hang on long enough to see rising property values, a couple might simply be more willing to cut their losses and part ways. They’re more likely now than ever to see a net positive. Again, it’s really a matter of perspective. Some marriages can become stronger for the struggle and emerge better off than they were beforehand.

This is all something to consider as you continue your studies in college. Financial planning and literacy isn’t necessarily something a student has to pursue but they are, in fact, mandatory life skills. The power you have is choosing between learning that the easy way or the hard way. Developing healthy habits now and continually reinforcing those decisions will pay off many times over, especially should you get married.

Don’t be afraid to tap into experts, either. One easy recommendation from HighPoint Advisors is to start early and budget for both routine and unexpected expenses. There’s nothing wrong with starting small just to begin building momentum.

“Most people don’t plan to fail, they fail to plan.” -- John L. Beckley

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