Having helped hundreds of couples retire, while also recently celebrating five years of marriage, we’ve learned a thing or two about navigating finances as a couple. Money can be deeply personal, and it has the potential to cause conflict in your relationship if you can’t get on the same page. Money conversations can be difficult. In fact, one in five married people say it’s the biggest issue they face.
Being a financially successful couple is possible, but it takes work. To help you and your partner build a healthier relationship with money — and with each other — we’ve compiled the top advice we share with our clients.
1. Discuss your money habits
Did you know more than two-thirds of couples are financially incompatible with each other? That’s according to a study by Bread Financial. When dating, we often focus on physical compatibility, but being aware of how you and your partner view money is invaluable. You may be a conservative investor, while your partner is more aggressive. Perhaps one of you is a saver, while the other is a spender.
Couples don’t necessarily have to have the same approach to find financial success; we certainly don’t spend or invest money the same way. But you do need to understand each other’s perspective. Share what “financial success” means to each of you. This will help you be aware of what each partner needs to feel financially stable and comfortable, both from an income and savings perspective.
Be honest with each other as you share your money habits. According to the same Bread Financial study, nearly half of adults say they have committed “financial infidelity” or admit to hiding purchases from their partner. It can be tempting to hide your financial baggage from a partner, especially if you’re living in debt, but transparency is important.
We’ve worked with many couples where one is ready to retire, while the other is still struggling under a mountain of debt, which is frustrating for both partners. If you are brave enough to disclose the good, the bad and the ugly to your partner, you can then create a plan that addresses any potential pitfalls and sets you both up for financial success.
2. Make a plan (whether joint or separate)
More often than not, when we meet with couples, one spouse knows their household budget and investment portfolio inside and out, while the other is in the dark — and often shocked by how much they actually spend and save. Both partners should be aware of how much money is coming in and going out each month.
Create a monthly budget that meets both your goals and needs. Talk about what you’re comfortable spending on gifts for each other. Discuss any big-ticket items you want to save for, like a home or yearly family vacation. Establish who pays for shared expenses, like utilities or rent.
Some couples find it easier to budget if their finances are combined into one joint account. Others would drive each other nuts if they joined accounts. Personally, we have combined most of our finances with the exception of one “fun money” solo account each to treat ourselves and buy gifts for each other. A certain amount of money gets allocated to those accounts each month. There’s no right or wrong way, so long as you create a plan that you’re both committed to and have agreed upon.
3. Prioritize retirement together
Saving for retirement can feel overwhelming, especially when you bring a spouse or partner into the mix. Can you afford to retire at the same time? Do you both want to retire early? Are you both saving enough money? A financial adviser can help you work through each of those questions and create a comprehensive retirement plan that addresses taxes, health care, income planning, investment planning and legacy planning.
Living with a “paying yourself first” philosophy can help you prioritize your financial future. Setting up automatic withdrawals into your retirement accounts will help avoid the temptation to spend the money elsewhere. If you’re just starting out in your careers, or in the early stages of parenthood, your budget may feel too tight to save for retirement.
No matter how much or little you’re able to save, create the habit of saving now and increase your contributions over time. Just like exercising or eating well, a new lifestyle is built one small step at a time.
4. Embrace hard conversations
Talking about money can feel uncomfortable for a lot of couples, but it’s important to push through the potential awkwardness and address difficult questions. For example, many couples avoid end-of-life conversations, but solidifying your estate plan is an important process to navigate together. If you have children from a previous relationship, discuss how that might affect your beneficiary designations. Remarried couples often choose to have their individual assets passed to their biological children, rather than naming each other or their stepchildren as beneficiaries.
No one likes to think about their relationship ending, but some couples should discuss getting a prenuptial agreement. They aren’t for everyone, but at the end of the day, you never know what life will bring, and a prenup can give both partners certainty about how your financial assets will be divided if you should divorce.
Before we got married to each other, we both experienced just how messy and expensive divorce can be. Everyone’s circumstances are unique, but carefully consider what kind of protection you might want to have should the worst happen.
5. Talk about money early and often
The earlier you can start these kinds of conversations, the better! Many married couples argue about money because they didn’t fully understand each other’s financial situation before walking down the aisle. It may not be a topic for your first date, but getting on the same financial page as your partner is important.
Consider putting a regular financial check-in on your calendars to help keep you accountable. One couple we worked with did a financial summit at the start of every year to define their financial goals for the year, map out any major purchases and address any problem areas. Setting up a quarterly or yearly meeting with a financial adviser can also be a stepping stone to financial conversations with your partner.
Being a financially successful couple isn’t necessarily about the amount of money in your bank account, but rather how well you can work together to reach your goals. Life is full of the unexpected, which means your financial plan is likely to ebb and flow. If you can keep the lines of communication open, you should be more prepared to handle whatever life throws at you.
After losing both his mother to breast cancer and a significant amount of money that she left him, Tim Schultz became a Licensed Financial Professional to help people never feel as helpless as he did. As the founder of Preservation Retirement Services, one of his joys in life is spending one-on-one time with clients to help them create safe retirement income strategies and preserve the money they worked so hard to earn. In his spare time, he loves spending time outdoors with his family, watching science-fiction films and being a tireless advocate for breast cancer research.
After 12 years of working as a successful commercial litigation attorney, Laura Schultz made the transition to being a wealth advisor to connect with clients and change their lives for the better by preparing them for retirement success. Now the co-owner of Preservation Retirement Services with her husband, Tim, she holds a Series 65 license and is an Investment Adviser Representative of Creative One Wealth, LLC. When she’s not helping clients understand and simplify their investment options, she loves cheering on the University of Iowa and spending time with her family.
After 12 years of working as a successful commercial litigation attorney, Laura Schultz made the transition to being a wealth adviser to connect with clients and change their lives for the better by preparing them for retirement success. Now the co-owner of Preservation Retirement Services with her husband, Tim, she is a Series 65 securities-licensed and insurance-licensed financial professional and holds a Series 65 license and is an Investment Adviser Representative of Creative One Wealth, LLC. When she’s not helping clients understand and simplify their investment options, she loves cheering on the University of Iowa and spending time with her family.
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