Behavioral Finance Lifestyle + Wellness

From The Wall Street Journal: Money Can Break a Marriage, Even Getting More of It

BY Spectrum Wealth Management | Apr 24, 2023
By Julia Carpenter
April 3, 2023

Many couples are finding that a financial windfall can rock their relationship just as much as any hardship. 

Parental advice, folk wisdom and academic research have devoted years of work and effort to understand what makes one relationship last and others break up. Not surprisingly, big changes in finances often shake the foundations of a relationship, but it isn’t just the loss of money that provides a test. 

Both gaining and losing money upends partners’ understanding of shared values, beliefs or assigned roles within the relationship. When couples cannot adjust to their new financial standing and fail to communicate their concerns or desires, the marriage may be in trouble, said researchers and relationships counselors. 

Competing visions for how to use a windfall can be harmful, said Marina Edelman, a marriage and family therapist in Westlake Village, Calif. One couple she worked with recently came into a windfall from the husband’s splashy new job, but working together to decide how that money would shape their future as a household revealed enormous gaps in their communication.


“All the joy and the excitement got wiped out,” Ms. Edelman said. “They were so focused on what the windfall will buy from a materialistic standpoint, and not focusing on the accomplishment. That really rocked their marriage.” 

Behavioral economists have found that the prospect of losing money has a stronger emotional effect than gaining a similar amount. But when it comes to marriages, new research suggests big financial swings in either direction can shake couples much the same way. 

Both scenarios can expose fault lines in the marriage that had previously been withstood or ignored, said David Cesarini, an economics professor at New York University. 

Researchers Mr. Cesarini and Anastasia Terskaya tracked lottery winners in Sweden for 10 years after they hit the jackpot. In a working paper published in March, their team found something surprising: who held the winning ticket significantly changed what happened to the marriage. 

In the long-run, male winners saw reduced divorce risk and higher fertility, leading to stable marriages and family formation. When a woman held the winning ticket, the windfall of around $100,000 and $500,000 increased the likelihood of divorce, especially for low-income women and those who earned far less than their husbands. 

“Lower-income households are more impacted by changes in economic circumstances, not just positive windfalls but also when something bad happens,” Mr. Cesarini said. “It is more disruptive for the marriage.” 

Adam Kol, a financial therapist based in Fort Lauderdale, Fla., said he’s worked with client couples who have experienced both setbacks and windfalls, and in both cases, the accompanying income shock often brings around a change in power dynamics—regardless of where the couple lands on the income spectrum. 

“It is incredible how I see the same patterns with couples who make $100,000 or $1 million a year, if the communication is lacking,” Mr. Kol said. 

In some partnerships, Mr. Kol said, one partner takes on the lion’s share of the financial duties, acting as the “household chief financial officer.” These couples are more vulnerable to conflict if the financial status quo then changes, because they don’t share an understanding of their cash flow and net worth. 

“If you don’t know where you’re at financially, you only know, ‘Well, our income just got cut in half. What are we going to do?’ So if you both don’t have that understanding, help each other get there,” he said.

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Couples flounder if they don’t have a plan for their future as a household or a baseline understanding of how they’ll handle such an income shock, he said, regardless of the money at hand. 

“More than once I’ve referenced Biggie Smalls to a client: ‘You know, “More money, more problems.”’”

But even as changes in finance can cause problems, more money is generally associated with more stability, research shows. On the whole, wealthier couples have a lower risk of divorce, said Alexandra Killewald, professor of sociology at Harvard University. Households with a net worth under $40,000 divorce at a higher rate, signaling that in many marriages, Prof. Killewald said, wealth does more than simply buy things or accumulate assets. Financial stability eases stress and saps conflict, which shapes how people feel about the union under different financial conditions, she said. 

“Money has implications for people’s family lives, not just because of strictly what we can do with it. There are these indirect emotional, cultural aspects of money and what it means.” 

This article was originally published in The Wall Street Journal on April 3, 2023, and written by Julia Carpenter. Image courtesy of WSJ.


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