Topical Research

Research_IconThe Research: Money, Relationships, and Equality

In this section we present real and relevant research related to the topics of money, relationships, and equality.

Financial Research 

Are you eligible for student loan forgiveness? 

A recent government watchdog report showed that 99% of student loan forgiveness applications were rejected. The cause? The majority of applicants were currently under a student loan repayment plan that was ineligible for forgiveness.

The honeymoon maybe over for some newlyweds
New research from Experian reveals that many newlyweds are surprised by their spouse’s financial situation and that credit scores are having an impact on their financial goals (Experian Consumer Services, 5/2/2016).

Wedding bells don’t always mean financial bliss for couples
TransUnion’s survey finds that most couples don’t talk about finances until after marriage (TransUnion, 5/27/2015).

TransUnion reveals nearly one in five couples does not talk about their finances until after marriage
A new survey from TransUnion reveals a lack of marital bliss when it comes to couples’ division of financial responsibilities. While married and engaged couples say they have intentions of making budgeting and financial decisions equally, roles changed once married (TransUnion, 2/13/2013).

If money does not make you happy, consider time
Although a substantial amount of research has examined the link between money and happiness, far less has examined the link between time and happiness. This paper argues, however, that time plays a critical role in understanding happiness, and it complements the money-spending happiness principles developed earlier by offering five time-spending happiness principles: 1) spend time with the right people; 2) spend time on the right activities; 3) enjoy the experience without spending the time; 4) expand your time; and 5) be aware that happiness changes over time (Aaker, Rudd, Mogilner, 2011).

Relationship Research 

Marriage and divorce
American Psychological Association provides this round-up of research related to marriage and divorce (American Psychological Association, 2015).

The decline of marriage and the rise of new families
Pew Research Center reviews the recent demographic changes in family life. These transformative trends include the decline of marriage and the changing structures and definitions of families. Authors underscore the differences related to economic and generational differences (Pew Research Center, 11/18/2010).

The reversal of the gender gap in education and trends in marital dissolution
Research on marriages formed after the mid-1980s, when women started earning higher education degrees at higher rates than men, show that times have changed. Marriages in which women have the “educational advantage” are no longer at higher risk of divorce. Put another way, research no longer confirms the lay theory that women who are more educated than their husbands are more likely to be divorced (Schwartz and Han, 2011).

Attention cohabitors: Having a baby before marriage no longer increases your risk of divorce
New research indicates that couples who marry after their first child is born now stay together at the same rate as those who marry before the child arrives, which is contrary to most of the prior research (Council on Contemporary Families, 9/16/2015).

Research on Finances (including Division of Responsibility) and Relationships  

Financial integration and relationship transitions of young adult cohabiters
Young adult cohabiters are intertwining credit histories and bank accounts, and acquiring assets such as purchasing homes together. Cohabiters are predominantly integrating finances out of necessity; practices are adopted in order of increasing (exit) costs. Sharing a mortgage was associated with an increased likelihood of marriage, whereas joint credit card accounts increased the odds of dissolution. In the paper, Addo argues that joint credit card accounts are not only costly in the short-term given its attributes, but may be even more costly to unravel within a marital union compared to cohabiting union, i.e. “your debt is your debt for cohabiters versus your debt is our debt within a marriage.” For cohabiting couples that may be adopting combined practices to learn about each other’s finance, combining a credit card account appears to have the unintended consequence of signaling that transitioning into marriage with this person may have significant costs in the event of dissolution and therefore it may be wise to get out now. So although their intent may be to merge finances as a step toward greater commitment, unlike a mortgage (which is a debt that seems likely to build joint capital), consumer debt is a subtraction from total assets and reminds people of the potential misuse of joint funds or loss of them in the event of a breakup. Cohabiters with an intent to marry were much more likely to start integrating their finances prior to marriage (Addo, 2016).

The influence of a financial management course on couple’s relationship quality
This mixed-methods study investigated the influence of a financial management course on couples’ relationship quality. 32 couples who attended a 13-week financial management course were surveyed about their relationship quality at the beginning of the course, at the end of the course, and six months later. Results showed that couples who attended the workshop showed improvement in their relationship quality. What’s more, greater implementation of financial management practices corresponded to greater relationship quality improvement (Zimmerman & Roberts, 2012).

Financial harmony: A key component of a successful marriage relationship
Washburn & Christensen’s research suggests that couples in successful marriages have mastered the skill of financial harmony in their relationships. They find that marriage commitment and healthy communications are maintained when couples have set guidelines and boundaries for their financial decisions. Thus, understanding the value that each partner places on money, and respecting that both partners will have equal rights and responsibilities with control of the finances, strengthens the marriage bonds. They also review implications for financial educators (Washburn & Christensen, 2008).

For richer, for poorer: Money as a topic of marital conflict in the home
This statistical analysis was based on dyadic hierarchical linear modeling of 100 husbands’ and 100 wives’ diary reports of 748 conflict instances. Contrary to findings from previous laboratory-based surveys, spouses did not rate money as the most frequent source of marital conflict in the home. However, compared to nonmoney issues, marital conflicts about money were more pervasive, problematic, and recurrent, and remained unresolved, despite including more attempts at problem solving. Implications for professionals who assist couples in managing their relationships and family finances are discussed (Papp, Cummings, & Goeke-Morey, 2009).

Cohabiting couples and their money
Pew Research Center discusses the trends related to cohabiting couples and their money. They explain the different ways to measure income and poverty and how this may affect researcher understanding of couples’  finances. They then review the research on couples who live together, unmarried, and the way they organize their financial lives (Pew Research Center, 11/22/2011).

Financial issues and relationship outcomes among cohabiting individuals
Research on why cohabiting couples break-up suggests that financial issues may be a major culprit; these issues were associated with a couple’s decision to break-up whereas financial well-being had no impact on keeping them together or breaking them up. What’s more, the analysis showed that this was the only type of disagreement that predicted a break-up. Related, if there was financial unfairness perceived in the relationship, the couple was more likely to break-up. Finally, the study also reported that women who perceived unfairness in the area of household chores were more likely to break-up whereas the opposite was true for men (Dew, 2011).

Child-rearing norms and practices in contemporary American families
Division of Labor within the house. Despite the goal to divide housework and childcare evenly in dual-earning families, generally, couples’ time is spent differently than they perceive. Before childbirth, women and men had comparable averages of work and housework. However, after the first child was born, women’s total work hours spent on work, housework, and childcare, increased from 56 to 77 while men’s time spent on these tasks increased from 59 to 69. Interestingly, both women and men overestimated the amount of time they felt they were doing these tasks, with men overestimating more…. especially regarding housework, where men overestimated their weekly time spent on the task by 13 hours (Council on Contemporary Families, 1/28/2015).

Financial affairs? Money management in same-sex relationships
This qualitative analysis of how 22 co-habiting same-sex couples manage and think about their finances finds that partial-pooling and independent management are the most popular systems for same-sex couples. These both come with with emphasis placed on egalitarianism and devising a fair money management strategy. Interestingly, significant income disparities between most partners necessitated the adoption of a system of proportional contributions to joint expenses. Despite attempts to equalise outcomes, an underlying norm of equality (characterised by equal contributions) paradoxically (re)produced the status and control of the higher earner in most cases. A degree of financial autonomy was an important ideal highlighting a valuing of co-independence rather than financial ‘merging’ for lesbian and gay couples (Burns, Burgoyne, and Clarke, 2008).