money and marriage

Who manages the money in a relationship?

Common wisdom tells us that the partner who is most knowledgeable about money becomes the  money manager. Sounds logical.
But that’s not what researchers Adrian Ward and John G. Lynch both psychologists and marketing professors found.
Examining 313 couples early in their relationship, they asked about financial literacy, credit score, income, and time spent on household work. They found NO correlation between financial abilities and who became the household chief financial officer (CFO). They found that the person who had more time and hated the task less was the one who took the responsibility.
In another larger study the researchers found that after 5 years the financial CFO develop significant financial literacy while the non-CFO deteriorated in their financial skills.

Other researchers have found that people develop financial expertise on a “need to know” basis more readily than through a formal course.

Many marriages of long duration end in widowhood or divorce, often leaving the less knowledgeable partner wishing they knew more about the couple’s finances.

Source: “Deciding who becomes the CFO of the home” by katy McLaughlin, WSJ,4/10/10.
Source: Financial Planning for Women