Impact on the Lives of Family, Peers, & Loved Ones

Money has powerful impact on individuals’ lives and spills over into their relationships with family, friends, and associates. “Without financial literacy, divorce rates soar, families rupture, and women stay with abusive men for financial security.”

Money stressors have been proven to play a major role in the downfall of romantic relationships and marriages. Couples argue about money regularly, at least monthly on average, but a large percentage of couples cannot recover from their financial woes. A national survey from Experian looked at 500 adults who had been divorced over a 5-year period, wherein 59 percent said finances played somewhat of a role in their divorce, while 20 percent said it played a big role. The implications of divorce add a whole new level to financial stress, as assets are divided and costs are multiplied across two households.

Beyond love and money is the extreme situation of people who remain in abusive relationships because they lack financial literacy and security and do not feel confident that they can sustain themselves alone. Often the abusers control their financial assets – bank accounts, credit cards, and paychecks – which prevents the victims from escaping violent situations.

Research, Statistics & Quotes

Finances are the leading cause of stress in a relationship.
SunTrust Bank

Some 35 percent of all respondents experiencing relationship stress said money was the primary cause of friction.
CNBC

In the results of a survey of 500 adults who had been divorced in the last five years – 59% said finances played somewhat of a role in their divorce with 20% saying it played a big role, which isn’t great. Even more worrying, 71% of women and 60% of men said that their former spouses spending habits ended up being different than they thought they would be before they were married.
Experian study as reported in Bustle

36% of couples argue about money on at least a monthly basis.
TD Love and Money Report

54% of respondents say that money is their biggest relationship stressor.
Personal Capital

Survey data shows that poverty has significant negative effects on interpersonal relationships, including those with friends and parents.
Joseph Rowntree Foundation

Overall, the share of 18-to-34-year-olds living with their parents has climbed from 26% in 2005 to 34.1% in 2016. For the bulk of this group, living at home is a reflection of their economic circumstances, Vespa said. Roughly 81% of 18- to 34-year-olds living at home are either working or in school and they’re less likely than their other young adult peers to have a bachelor’s degree or a full-time, year-round job.
MarketWatch

Results were consistent with predictions from the FSM in that economic hardship led to economic pressure which was associated with parental emotional distress and couple conflict. This conflict was associated with harsh parenting and child problem behavior. This pathway remained statistically significant controlling for externalizing behavior in toddlerhood.
Journal of Family Psychology

Less well-off children have worse cognitive, social-behavioral and health outcomes in part because they are poorer, not just because low income is correlated with other household and parental characteristics. Low income affects direct measures of children’s well-being and development, including their cognitive ability, achievement and engagement in school, anxiety levels, and behavior.
JRF

Family distress causes problems in the relationship between adults that are, in turn, linked to less effective parenting – a complex notion that involves insufficient surveillance, lack of control over the child’s behavior, lack of warmth and support, inconsistency, and displays of aggression or hostility by parents or older siblings.
Humiliation Studies

Only about 57 percent of money loaned to friends and family members is paid back.
LendingTree

Teens have cited ‘friends’ as the strongest influence over their purchase decisions.
Piper Jaffray survey as reported by Forbes

Less well-off children have worse cognitive, social-behavioral and health outcomes in part because they are poorer, not just because low income is correlated with other household and parental characteristics. Low income affects direct measures of children’s well-being and development, including their cognitive ability, achievement and engagement in school, anxiety levels, and behavior.
JRF

Approximately 53% of females and 52% of males indicate that social media impacts their purchases with Facebook being the most important, followed closely by Twitter and Instagram. But the popularity of Facebook is waning among teens with 33% citing it as the most important, down from 42% six months ago.
Piper Jaffray

“Without financial literacy, divorce rates soar, families rupture, and women stay with abusive men for financial security. A lack of jobs contributes to riots and illegal activity. Name any situation and it goes back to money. We need to focus on poverty eradication.”
– John Hope Bryant, CEO of Operation HOPE

NFEC Position Statement

Financial hardship can have devastating effects on families – from losing their homes, to separating family members, to consistently worrying about how they’ll pay their monthly bills. Financial problems are handed down through the generations; proactive effort is needed to break the cycle.

The NFEC developed its resources to encourage families to learn together. That’s where our honored financial education champions come in – in partnership, we can spread this vital education to as many families as possible. Learning as a team provides accountability and helps get family members working together toward common goals. Because money elicits emotions, care has been taken to make family projects interactive; and family members can start participating as young as age 5.