Steve Cotton discusses the impact of finances on marriage

Episode Transcript

Speaker 1 (00:00):
My name is John Mounts, filling in for JT. And
financial stress is a leading cause of divorce, and that's
not really a surprise to a lot of people. But
one of the things that is new is the amount
of divorce we're seeing, especially post pandemic. Joining me now
is Steve Cotton. He is the president of Cotton Wealth
Management Associates, and he's helped develop a policy for us,
for the Congress and for the White House. Steve, welcome

(00:22):
to the show.

Speaker 2 (00:23):
Well, good morning, glad to be with you.

Speaker 1 (00:25):
I'm glad to have you on, Steve. So, this is
an issue that a lot of people are facing these
days because it seems post pandemic, there's been a lot
more divorce going on, and one of the leading contributors
is the financial stress. Can you explain why it is
that this is coming up, especially now?

Speaker 2 (00:41):
Well, it is a major problem cause of lots of divorces,
and it doesn't really matter how much money a couple has.
I have clients that are very high net worth clients
and they have the same kinds of financial problems that
people with lower incomes have. What I see though, is
sometimes you'll have a couple with different values. One's a saver,

(01:03):
one's a spender, or they have different decision making patterns.
One's very thoughtful and consultative with the other one, the
other one is impulsive and doesn't consult. And then sometimes
it's just a financial awareness. You know, one tracks all expenses,
keeps receipts, the other one has no clue as to
where the money goes.

Speaker 1 (01:23):
And of course with a lot of families, you're right,
there is a yin and a yang, and it doesn't
it doesn't like it's not necessarily a bad thing because
if you have two ones a saver, one's a spender,
if they were both savers, then they'd never have any fun.
If they were both spenders, they'd be broke. So I
think sometimes it's good that when one couple, when one
member can you compliment the other. But the problem is

(01:45):
when they can't come to agreements. At some point they say, Okay,
we're going to spend this money on vacation. The other sense,
we're not taking a vacation at all, and we have
to come to a Okay, we're going to take a vacation,
but we're only going to go for four days instead
of a week. We're only going to go to you know,
Paris friends instead of Paris, you know Paris, Texas, you
know that kind of thing. I think maybe that might

(02:07):
be the issue, is you can't come to an agreement,
and it might be emblematic of a larger struggle between
the two people in the relationship that they can't get
along on a number of issues, and just money happens
to be the one that's the sticking point.

Speaker 2 (02:19):
Well, that's true, but I think in a lot of
cases people have never made the shift from being single
and accountable to no one to now being part of
a financial team. And it's like it's like being on
a football team but pretending like you're the only player
on the field. And people don't always make that shift,

(02:40):
and you have to really be conscious about making that shift.
You have to now be conscious about consulting with your
partner ahead of time, and you you also have to
give the other person a little bit of grace, especially
if you've got these big differences. You know, sometimes you
know you ought to say, okay, let's do it you're

(03:00):
and sometimes your other partner should say, okay, let's do
it your way. But compromise and communication is absolutely key.
But this idea that you're a part of a team
now is what sometimes people don't really fully embrace.

Speaker 1 (03:15):
Steve, what are your thoughts about checking accounts, having separate
checking accounts versus a joint checking account. What's your recommendation.

Speaker 2 (03:23):
I think it's frankly a good idea, I think, And
what I tell my wife is, I want you to
have your checking account. You want to have some money
that you don't have to account to me for on
the spending. I'm going to have a little checking account,
same thing, but then we're going to have our checking
account where we pay the household bills out of and
make major financial decisions. I think it's imperative that each

(03:47):
person in the partnership have some degree of autonomy on
the little things and work as a team with a
joint checking account, say on the big things, and partnership
should not be a concentration camp. But by the said,
you got to have some teamwork if you're going to

(04:08):
win the game.

Speaker 1 (04:08):
In other words, we have your money, we have my money,
we have our money. And I will tell you that
makes it easier when it comes time to do a
Christmas present or a Birthday present, because it's really obvious
when you only have one account and you can clearly
see the money come out of the account and what
it went for, and said, okay, I see what I'm
getting for my birthday.

Speaker 2 (04:26):
Absolutely. I had one guy one time that said, you know,
I really get upset when my wife goes to beauty
parlor and spends one hundred and fifty dollars. And I said, well,
what kind of things have you spent money on that
are essentials? He said, Oh, I just got a bass
boat I had to have. And it just points out
the disparity and values sometimes. But if people can talk

(04:48):
to each other and agree on some basic financial priorities,
sometimes that helps solve all kinds of problems.

Speaker 1 (04:55):
Steve, are you saying a bass boat is not considered
an essential item?

Speaker 2 (05:00):
Well, in Alabama it should be.

Speaker 1 (05:02):
But you know, we have to eat. You need some fish.
It makes sense.

Speaker 2 (05:07):
Well, I know, but some For a lot of women,
going to the beauty parlor is a big deal. And
you know, a husband is wise if he will grant
his wife some grace and let her make some financial
decisions on her own. That's very important. It doesn't mean
you're less of a man. It means that you're working
from a position of strength and partnership.

Speaker 1 (05:28):
Happy wife, happy life. I get you. Steve Cotton, thank
you so much for joining us this morning on Alabama's
Morning News