Study reveals glimpse into couples' financial management

Quebec's financial SRO reveals the good and bad money habits of couples

Study reveals glimpse into couples' financial management
Steve Randall

Couples are almost certainly having regular conversations about the cost of living, but how do they manage their finances together?

A new CROP survey for the Chambre de la sécurité financière (CSF) in Quebec reveals that couples in the province are generally good at talking about finances, but there are some areas that cause friction.

"This survey tells us that 90% of people questioned feel comfortable talking about investments and debt with their spouse, which is excellent news," stated Marie Elaine Farley, CSF President and Chief Executive Officer, before highlighting the following paradox: "So it's surprising to learn that half of respondents have never even thought about the consequences of a separation and 74% have never raised the subject with a financial service advisor."

Almost six in ten respondents said that they pool their incomes as a couple for everyday expenses, rising to 70% where both partners earn roughly the same.

However, almost two thirds of women said that they earn less, or significantly less, than their partner. Only 27% of men said this.

Slightly more than half of couples said that it is mainly only one of them looking after financial planning and this is more likely where one partner earns more.

"In situations where income differences are substantial, even if spouses opt to split the bill proportionally based on each partner's income, expenditures will weigh more heavily on the person earning less,” explained Hélène Belleau, Ph. D., sociologist and INRS professor, who participated in the analysis of the survey. “For example, the choice of purchases is often based on the income level of the person earning more, which will put their partner at a disadvantage because they will be living noticeably beyond their means." 

Personal debt is a substantial cause of anxiety, which is worsened when income levels differ. Almost six in ten spouses (57%) feel stressed because of their personal debt and 41% say they feel anxious because of their partner's debt. Anxiety levels are higher among the more affluent and in people earning less than their partner. 

Going solo

There are some areas of couples’ finances that tend not to be shared.

Retirement planning is generally done individually (46%) although 29% of couples do so with their spouse. Worryingly, 20% said they have saved nothing for retirement.

Many partners also admitted to having a secret fund with 27% putting aside money without their partner knowing. This percentage more than doubles among those who are financially very comfortable.

"We don't have data on why certain categories of people are more likely to stash money in secret, and there certainly may be good reasons to do so. However, it is clear that some may be trying to prepare for the economic consequences of an eventual break–up," concluded Professor Belleau.