Financial Dependence - Expatriation's Dirty Little Secret

For many accompanying partners the decision to relocate for the benefit of their partner’s career often has a negative impact on their own.  Some partners will not be permitted to work whilst overseas and others will choose, for various reasons, not to work.

Whilst the decision relating to the accompanying partner’s career receives careful consideration, the associated issue of financial dependence of the accompanying partner rarely does, yet it can be one of the most difficult issues for expatriate couples.

Of course, not all couples have to confront issues arising from financial dependence when they expatriate but if you do find yourself in the situation, here are some of the challenges you might face:

Financial dependence can be an identity issue.  If you are used to having your own income and making your own financial decisions, financial dependence can raise a whole host of issues.  Loss of control over household and personal expenditures and guilt about not making a financial contribution can leave you feeling powerless.  This is often exacerbated by the restrictions on your ability to have your own bank accounts or even joint accounts with your partner in some countries.  The way you and your partner choose to manage your financial arrangements can also have a significant impact on how being financially dependent makes you feel.

Financial dependence alters relationship dynamics.   There’s nothing more likely to make you feel inequality in your relationship than having to ask your partner for money when you have previously been financially independent.  Your agreement on how you handle money issues between you and the way in which you both execute that agreement can either diffuse the issue or can make it a major problem.

Financial dependence exposes the accompanying partner to risk when circumstances change.  Not everyone uses an international assignment to get a better deal in a break up as suggested in this article but what happens if your relationship breaks down or if your partner dies?  Of course no one thinks this will happen to them and no couples like to discuss divorce or death, but either can happen and as a financially dependent accompanying partner you can find yourself with significantly different rights in both of these circumstances than you would have in your home countries. If that isn’t scary enough, rights to custody of children in the event of martial breakdown can be significantly different too.

Being financially dependent can have consequences for your financial future particularly if your overseas experience becomes longer term.  Being financially dependent over the longer term can mean that you have significantly lower earning potential, impaired access to credit because of gaps in your credit rating and lower pension.

It would be easy to say that no accompanying partner should ever put him or herself in a position of financial dependence, however that would overlook the fact that the decision to relocate is about so much more than money for many couples and families.  So, in our DECIDE and PREPARE programmes, we encourage couples and particularly accompanying partners to take on financial dependence is an informed way and plan around it to minimise its potential to cause problems.  Here’s are some of the important steps we encourage couples to consider.

1. Do your research – understand your legal status in the event of death or divorce of your spouse or partner.  Do what you can to mitigate those risks using wills, legal agreements between you and if necessary, transferring assets.
2. Discuss the budget, lay the ground rules and stick to them.  These will vary from couple to couple depending on what makes you both comfortable but consider issues such as how much each of you can spend on personal items without consulting the other and how you get access to money if you can’t have your own bank account.
3. Ensure that you retain ownership of assets either separately or in joint names.  Consider making some of your money “our money” not “my money” and “your money’.
4. Be involved or stay involved – financial dependence doesn’t have to mean financial ignorance.  Ensure that important financial decisions are joint ones, participate in both management of expenditures and investments, know how to access your joint assets and be aware of what and where they are.
5. Value and respect each other’s roles – no more jokes about one partner earning all the money and the other spending it.

If you’d like to learn more about our programmes and how they can help you to make an informed transition to an expatriate life, click here