The Problem – Finance
As the cost of living continues its upward spiral, increasing pressure is being placed on families and individuals to effectively manage their budgets. Recently released data identified increased financial stress as having a significant negative influence on relationships and ultimately contributing to Australia’s increasing divorce rate, with 47, 638 couples divorcing in 2013, an increase of 8.7% since 2008.
Prominent family law practice, Owen Hodge Lawyers, collated data from over 100 of its divorce clients to determine what was contributing to relationship breakdowns. The results highlighted that:
- 43% of relationships ended in divorce due to financial stress
- 31% related to extra marital affairs
- 15% identified changing values and goals
- 11% nominated personality differences as the major contributing factor to divorce.
There are a number of trends that have become apparent in recent years. One is the pressure of ‘keeping up with the Joneses’. This often translates into significant extra pressure being placed on the family budget. Another trend is that households with children generally seem to experience higher financial stress levels. This situation is sometimes further exacerbated when one parent stops working to look after the children.
A red flag often appears around the seven to ten year mark in relationships. An increasingly common trend at this time is that many people are finding the inevitable challenges in the relationship too hard for a variety of reasons, including financial issues, and therefore opt out via a divorce. This situation can also be duplicated after twenty plus years of marriage. Significantly divorce can be triggered in some cases by the changing financial circumstances facilitated by the children leaving the family nest and taking their board payments with them.
The reality is that the younger generations coming through today, in a surprising number of cases, have been part of dysfunctional family households. In an attempt to protect their financial assets, this cohort is increasingly turning to pre nuptials prior to marriage or longer term relationships to help ensure a measure of financial security in the event of a marriage or relationship break-down.
The income gap between men and women is narrowing. Consequently, women are progressively turning to pre nuptials to protect their financial interests in the event of a relationship collapse. Today’s younger generation of women is more aware of their financial situation when compared to the older generation.
The downside associated with divorces has become increasingly apparent over many years and financial issues all too often underpin the unravelling of marriages and relationships generally. It is important for individuals to safeguard themselves against any relationship breakdown. This can be achieved by seriously considering a pre-nuptial before moving in together and actively participating in all financial decision making to help minimise tensions that could lead to possible relationship disintegration.
Considerations to be made before moving into relationships or marriages
1)Consider a pre-nuptial prior to moving in together.
2)Know the financial situation of each other prior to moving in together.
3) Participate in all financial decision making related to the relationship.
4) Identify and value all assets so each party knows their exact financial position prior to entering a relationship.
5) Communicate with each other to try and sort out differences before turning to the courts.
If you require any further information or would like to speak with an experienced family lawyer, don’t hesitate to contact Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the any of your legal needs. Please call us to schedule a consultation at 1800 780 770 at your earliest convenience.