The division of labor in a relationship is one of the top sticking points for couples. Who takes out the trash, who washes the dishes, who cleans the toilet, who feeds the cat—these little things can cause big conflicts.
A less obvious set of chores are the financial functions of being in a relationship—paying the rent, setting up the electric bill, figuring out the best deal for a phone plan. Those tasks usually go to one person, too, said Adrian Ward, an assistant professor of marketing at the University of Texas at Austin’s McCombs School of Business who studies consumer behavior and financial decision-making.
And while you might feel lucky if you’re not the one in charge of money stuff, it could be hurting you in the long run.
“That’s fine as long as you both stay in love forever and you both live forever,” he said.
Does not compute
Our country has a problem with financial literacy, Ward said. But financial education doesn’t do much to help. We might have taken an optional class in high school that taught us how to balance our checkbooks or start a savings account. But by the time we actually need to use that information, it’s no longer in our brains.
“We have limited cognitive resources, we have limited time,” Ward said. We can’t possibly hold everything we learned as teenagers in our brains forever—just try to remember what you learned in pre-calculus—and if we don’t need to know it, it typically goes into the mental trash.
Even after finishing school, people aren’t necessarily making financial decisions for themselves, Ward said. A lot of people put it off, or stay linked to their parents financially.
“People aren’t making financial decisions because they’re hard,” he said. More often than not, we don’t make financial moves until we absolutely need to.
The catch? Unfortunately, because data suggests financial education doesn’t really work, Ward said, it seems the only thing that can really teach us financial literacy is by doing. Because most people don’t know what they’re doing when it comes to making financial decisions, they put it off. But by putting it off, they’re preventing themselves from learning.
But, eventually, most of us have to become self-sufficient. For some of us, that happens when we find ourselves in a serious relationship.
And though most partners start out at the same level of financial literacy, Ward said, the one who takes on the financial responsibilities, the person Ward’s research refers to as the “household CFO,” will wind up leaving their partner in the dust when it comes to financial know-how. And that can be really harmful if the couple breaks up or when one of them dies.
“The big idea here is that we’re not going to learn the things that were not incentivized to learn, and our relationships are one of the biggest predictors of what we need to know,” Ward said.
The downside of delegating
When we couple up, “pretty quickly one person ends up handling most of the (money) stuff,” Ward said. Just like “both partners (don’t) need to make dinner every night and you don’t need to take turns pushing the lawnmower,” it feels most efficient for one person to deal with it.
Typically, that’s the person who makes more money, hates money stuff less, does less chores or childcare or is older, if there’s an age gap in the couple, Ward said. He and his research team discovered that by looking at data from thousands of relationships ranging from nine months to 45 years in length.
However, most couples think they’re giving the task to the person who knows the most about finances. This typically isn’t true, Ward said.
“If you actually ask relationship partners how they think it works, they think the one with more ability gets the job and that one stays good forever and the person who’s worse stays the same, or maybe gets better over time as the good person rubs off (on them),” Ward said. In reality, “people on average enter the relationship at the same level of financial ability and they diverge.”
“Once you start doing these things… the other person doesn’t, and you start getting this growing and growing and growing gap.”
This division of labor is causing some of us to fall farther behind when it comes to taking control of our financial lives and understanding the world of money. Someone who has been married for more than 40 years but has never had to think about saving or investing or picking out car insurance might be in the same place knowledge-wise as someone who’s just out of college.
“In relationships, we rely on each other, we offload some responsibilities, but we don’t recognize how this is shaping us over time,” Ward said.
How to change course
Every couple is different, so there’s not one right way to make sure everyone is getting the financial experience they need, Ward said. The best way to counteract this effect is to talk about money early on in your relationship. Then you can figure out what works best for you. Maybe you split up bills or other tasks, or set up monthly coffee dates to pay bills together.
“Once these roles are established, they really don’t switch… a lot,” Ward said. At the beginning of your relationship, “the roles are less entrenched, it’s less offensive bringing it up.”
It’s also good to recognize that the best way to take care of someone isn’t always to do things for them. Sometimes it’s to support them while they figure things out on their own.
“It becomes a problem when you’re on your own, whether for a weekend or a long time,” Ward said. By doing everything for your partner, “you could leave someone in a place of vulnerability. Or allowing someone to care for you, you could allow yourself to be vulnerable.”
And what if you already feel behind? Unfortunately, it’s not as easy to catch up as you might think. In one experiment, Ward and the other researchers had people of different financial abilities make decisions about car loans. Everyone was given information to read before they had to make a decision.
Instead of the reading materials evening the playing field, “what we find is actually those who have offloaded the most responsibility… read the least because they can’t make sense of it,” Ward said. Catching up is “not impossible but it takes time,” and it requires you getting practice, not just reading up on the topics.
“Try not to get there, but if you are there, recognize that you can’t just snap out of it,” he said.
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