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Financial risk tolerance may define your risk of divorce

On Behalf of | Aug 2, 2021 | Divorce |

A study performed on 5,300 German couples between 2004 and 2017 was recently published in The Economic Journal by researchers at the University of California-San Diego. This study looked at how likely these individuals were to take risks, including how often they’d take financial risks. 

Researchers took this data and adjusted it for control characteristics for those couples. After adjusting for people of different religions or cultural backgrounds, the researchers discovered that financial risk tolerance was a top dividing issue among couples. 

Financial risk disagreements double the risk of divorce

According to the study, disagreeing on how to spend money (as well as when to spend it) made couples twice as likely to divorce as those who did agree on financial matters. It makes sense, since arguing about money is a common cause of divorce. 

The problem isn’t as much about how much money a couple has or doesn’t have but instead their tolerance of risk-taking behavior. If one person wants to save while the other only wants to spend, this is a major difference in their behaviors and more likely to cause disagreements. 

Does anything help couples overcome differences in risk tolerance?

Compromise and communication may be the answer, based on the study. Couples who pooled their resources seemed to be better able to handle disagreements. This could, though, also be another source of conflict if one spouse earns less or has a less reliable stream of income. 

People looking to divorce over financial issues isn’t unusual. This study just suggests what many people may already believe to be true: Disagreements over money often end marriages and leads to divorce disputes.