In-Laws in Your Wallet? Financial Experts Offer Tips to Avoid a Marital Money Meltdown

Jokes about in-laws often get a good laugh, but when it comes to marriage and money, family members meddling in couples’ finances is no laughing matter.

Financial involvement from in-laws comes in all forms and guises. Some parents may want to pay for everything and then weigh in on all future financial decisions. Cash-poor parents may constantly ask for handouts to pay for this and that expense. There is a litany of scenarios.

A 2023 survey of 1,000 Americans commissioned by Forbes Advisor showed the leading factor for divorce was “lack of family support.” This factor alone accounted for 43% of divorces, far ahead of a distant second “infidelity” (34%). 

With family matters weighing so heavily and “financial stress” also causing 24% of divorces, it becomes clear how in-laws’ financial influence finances may make or break a marriage.

There are, however, strategies to navigate the in-law challenges, from setting boundaries to opening communication – all best practices that can steer couples toward financial well-being.

When Different Worlds Collide

Having the “money talk” can be tough for couples. Getting on the same page financially, with joint accounts, budgeting, and more, takes time.

Yet when partners from socio-economic backgrounds merge, things can be especially tricky and put marriages at risk. Psychologists, as well as divorce financial advisors, point out that much of our thinking on money (commonly referred to as our “money story”) comes from lessons learned in our family of origin. When families come from starkly different class backgrounds, each set of in-laws may be pulling their children in completely opposite directions.

“Financial differences can absolutely wreck relationships,” says Michael H. Baker, Managing Member of Vertex Capital Advisors. “But differences don’t have to dictate your destiny… even couples with different backgrounds should be able to find core areas of agreement.”

“Finances are statistically one of the biggest reasons couples fight and this can be intensified when each person is coming from a different perspective or socio-economic background,” says Carman Kubanda, CFP and Financial Planner at Innovative Wealth Building. “I advise these couple to have a third party like a financial advisor to provide context and guidance to steer them to success.”

Although not universally true, in many relationships, one person typically takes on the role of chief spender while the other is the saver. Yet, finding that balance can be more difficult if their partner plays out that role very differently from how they saw their own mother or father spend or save. 

One way to manage this is structuring accounts so money remains sufficiently combined yet allows breathing room for a couple’s diverging spending or saving habits.  

“For couples that operate as a family unit (not just those that are “married”), I am a big proponent of joint and individual accounts,” says Brian Seay, Founding Partner of Capital Stewards. “This helps each member of the family maintain their independence, while also contributing to the collective efforts of the family. For families that come from different socio-economic backgrounds, having separate and joint accounts can be especially helpful as it can set clear boundaries and nobody feels taken advantage of.”

Clearing the Cobwebs

When there is no transparency around finances, partners often think their better half is making money moves the way they would – a disastrous assumption. However, communication can let some light shine in on the otherwise dark corner of the relationship.

“We find that creating a budget and financial plan often helps facilitate the dialogue around finances for a couple and their parents,” says Seay. “I’ve seen couples can share parts of their plan with skeptical in-laws to demonstrate that they are making good decisions. Even telling your in-laws that you have a formal financial plan goes a long way!” 

The Role of In-Laws and Inheritance 

To some degree, parental influence is inevitable. For instance, inheritance, by definition, involves in-laws. 

A recent study from IFS Research shows that, compared to previous generations, inheritance will play a disproportionately large ratio in the financial plans of millennials, roughly 16% of the total. The long-term economic trends, including rising income inequality, ballooning student debt, and falling homeownership rates, may hold the same pattern for Gen Z and beyond. 

Yet, if discussing money is difficult, talking about inheritance can be especially awkward. Married children or their spouses may fear bringing up the topic makes them seem greedy or insensitive to their parents’ privacy. Again, if one’s estate plans are shrouded in secrecy, getting professionals to step in can help. 

“For couples that may receive an inheritance but are not privy to the details, the financial planning process is a great way to encourage your in-laws to share more information,” says Seay. “You can blame it on your advisor!”

The impact of in-laws’ involvement in a marriage can be profound. Yet finding common ground through communication, boundaries, balancing, and seeking guidance from a local financial advisor can help couples maintain financial – and marital – harmony.  

Find a Financial Advisor

Do you have questions about your financial future? Find a financial advisor who can help you enjoy life with less money stress by visiting Wealthtender’s free advisor directory.

Whether you’re looking for a specialist advisor who can meet with you online, or you prefer to find a nearby financial planner, you deserve to work with a professional who understands your unique circumstances.

Have a question to ask a financial advisor? Submit your question and it may be answered by a Wealthtender community financial advisor in an upcoming article.

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Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.