Foundations for Strong Families 201. Introduction

01/09/2009

Changes in the housing and credit markets during the past year have led to increased recognition that developing comprehensive family-based money and credit strategies is critical in the short-term to weather financial storms, but also for long-term financial health of the children. Financial stability strongly interacts with family relationships. Each area can strengthen or challenge the other. Shocks to the pocketbook can foster conflict and seriously impact the stability of a couple’s relationship as well as their finances, especially when there are no rainy-day funds and little knowledge of where to turn for help. Relationships can become more vulnerable if bills pile up. On the other hand, strong relationships and familial support can act as a buffer during financial hardship.

Greater understanding of the similarities, differences, and interdependencies between relationships with a partner or spouse and one’s finances can better equip us for the task of increasing the stability of American families. Research shows that people who marry build more wealth over their lifetime compared with those who remain single. However, credit problems remain a leading reason that relationships dissolve. When people marry, they combine their lives, their finances, and their credit history, whether it is good or bad. Debts brought into a marriage pose one of the biggest problems for young couples.1 As debt increases, marital satisfaction decreases and results in less time spent together as a couple and more arguments over money.2 More than 70 percent of divorcing couples report that money and credit abuse by a spouse are contributing factors to their parting.3 Relationship skills and financial educators can play a key role in helping couples manage their individual financial histories to create a more financially secure future together.

This is the second of two briefs that examine the interplay between education and skills-building programming for lower income individuals and families in the areas of marriage and relationships, financial literacy, and asset development. It explores how communication, marriage and divorce, money management, credit and debt, children and child support, and other issues affect and/or are affected by familial and financial well-being. Also, it offers tips for practitioners working with couples to build intimacy and stable relationships with each other and with their finances. These briefs are intended for practitioners working in any of these areas and interested in learning more about the other fields and potential collaboration or idea exchange.

The brief focuses on romantic couple relationships and marriage; however, sharing financial resources can also bring benefits and challenges for co-parents, within extended families, and even between parents and children.

The first brief, Stable and Healthy Relationships and Finances, provided an overview of marriage and relationship skills education, financial education, and asset building programs and highlighted opportunities for collaboration. That brief described these fields’ common goals and complementary strategies for improving the stability of low-income families.

This brief builds on that foundation to focus on key areas where marital and financial stability overlap. While relationship education practitioners are generally aware of the importance of financial issues within relationships, the relevance of family and relationship issues may be less apparent to practitioners in financial education and/or asset building programs. These programs are more likely to focus on individuals and may ask an individual to develop goals for his or her family, but staff may not be comfortable delving into what are seen as “personal” issues, such as romantic and marital relationships. This brief explores concepts that impact both financial and familial stability, and describes how helping low-income participants in asset building and financial education programs build their relationship skills is relevant to building their financial literacy skills and fostering their overall well-being.

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