Ever seen the movie Pretty Woman? It details the love story between a wealthy man and a working woman. The romantic trope where two people from different socioeconomic backgrounds fall in love isn’t new. Still, it does pose a novel question — is financial dependence in a relationship good or bad? It’s admittedly hard to characterize something as entirely negative or positive. Often, various factors come into play, making the answer unique to each couple. We’ll cover the advantages and disadvantages of being financially dependent on your partner so you can make an informed decision about what’s best for your relationship.
What is financial dependence?
Financial dependence describes the state of a relationship in which one partner depends on the other for money. It isn’t gendered, meaning either the man or the woman in the relationship can be the dependent. Usually, the financially dependent partner has a lower income or no income and virtually zero savings.
The different ways a relationship can become financially dependent:
- Stay-at-home parents: The dependent partner might be a stay-at-home parent who takes care of the children and home in exchange for financial support from their partner.
- Disability: The dependent partner may have a physical or mental disability that leaves them unable to work.
- Encouraged to quit: The dependent partner might have been encouraged not to work by their significant other.
- No desire to work: Some people just have the option to not work and choose that path for themselves because they have a supportive partner.
Is financial dependence always a bad thing?
More often than not, financial dependence is cast in a negative light. Usually, it’s because the situation prevents the financially dependent person from leaving. Without their partner, they have no source of income for life’s basic needs and no savings or support system to fall back on.
However, some couples knowingly go into a situation of financial dependency for the better of their family or relationship.
Example: When one person becomes a stay-at-home parent, essentially giving up their career, they give up both their present earnings and future career potential. It’s essential that as soon as you both enter into this arrangement, everything should be seen as “ours” instead of “yours” and “mine.”
As long as the dependency doesn’t become a source of power, guilt, or contention, the relationship likely won’t suffer.
That doesn’t mean it isn’t risky, though.
The dangers of financial dependence
Generally, financial independence is a good thing, even if you’re in a loving and committed relationship. Being dependent can bring on several challenges. Here are a few of the most significant disadvantages of entirely depending on your partner regarding finances:
- Power Imbalances: When one partner earns all the income, it can create unhealthy dynamics within the relationship. The dependent partner can harness feelings of shame and guilt, while the supporting partner can have the upper hand in certain areas.
- Increased Vulnerability: Having only one income source in a family can lead to a financial crisis, especially with no cushion to fall back on. For example, if the main breadwinner loses their job, it can quickly become a fragile financial situation.
- Feeling Trapped: Financial dependence makes it difficult, if not impossible, to leave an unhappy or unhealthy relationship for the person dependent on the other.
How Dependence Impacts Relationships:
- Resentment and Guilt: The earner might feel burdened, and the dependent might feel inadequate, leading to tension.
- Pressure and Control: The earner may try to exert control through money, making the dependent feel they must “earn” their place.
- Lack of Freedom: The dependent may give up their own goals and interests to avoid financial conflict.
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How prenups can help financially dependent partners
Prenups traditionally have been thought of as only protecting the wealthy partner and serving no benefit for the financial dependent.
But that’s not true! Prenups protect the financially dependent partners, too!
Key Clauses in Prenups that Can Help the Less Wealthy Partner:
- Sunset Clause: Sets an expiration date on the prenup. This provides reassurance that if the marriage lasts, the dependent won’t be left with nothing in a divorce.
- Income-Sharing Provisions: Dictate how money earned during the marriage is handled – a joint account can help build financial security.
- Protection of Spousal Support: Prenups can ensure the right to receive alimony if needed upon divorce. Alimony can be extremely important for someone who is financially dependent person to continue to be supported even if the marriage ends.
- Clear Asset Definitions: This safeguards any existing assets the dependent brings in and can fairly address how shared assets grow in value over time.
- Lump Sum Clauses: A lump sum clause can help balance out wealth discrepancies by having the person with more money pay out the financially dependent party upon divorce to balance out any financial discrepancy. For example, Travis Kelce (net worth is $30 million) might ask Taylor Swift (net worth $1 billion) for a lump sum clause to balance out the wealth. (He’s not necessarily financially dependent, but you get the idea).
The bottom line is financial dependence in a relationship is risky
While being financially dependent in a relationship isn’t always a bad thing or a guarantee that the less wealthy partner will end up destitute, it is a risky proposition. Not having financial independence can be prohibitive in many ways, especially should you want to leave the relationship. It can be a good idea to leave the romantic relationship ideals we see in movies behind and treat marriage as what it fundamentally is – a business relationship.
While most of us dream of having an equal and supportive relationship regardless of who is the earner, it’s essential to be realistic. A prenup can protect both the income earner and the dependent should things go awry.
Co-create your future and cover your ass(ets) with a prenup today!
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at Hello@Helloprenup.com.
Thanks for tout article, I’m going to use it on my essay
So glad you found our article helpful! Be sure to source us in your citations for your essay. Happy New year!