Marriage and Money: Communication Is Key

Physician's Money Digest, February15 2005, Volume 12, Issue 3

You've entrusted your spousewith your life and love. Butwhen it comes to leaning onsomeone for financial advice, that's oftena different story. A new survey from A.G.Edwards & Sons (www.agedwards.com)shows that about 40% of Americans listedthemselves as the person they trust themost when it comes to making financialdecisions. Rounding out the money trustlist were financial advisors (16%), parentsor grandparents (15%), and then spousesor partners (13%).

"People with financial advisors areused to going to them for advice andknowledge about investing; so even ifspouses share financial decisions, theiradvisor still might be the most trustedconsultant or information source," saysSophie Beckmann, CPA, CFP® with A.G.Edwards. In fact, the study indicates thatamong people who have financial advisors,more trust their advisors as a sourceof financial acumen than they do themselves(41% to 31%), while the spouseranked even lower at 11%.

Granted, there are a lot of things thatcan get in the way of good communicationabout money, Beckman says, but itdoesn't have to be that way. The followingare some tips to help couples communicatebetter about personal finances:

•Set your goals straight, together.Recognize that you may be different.This doesn't necessarily mean one of youis from Mars and the other from Venus,but you should understand that each ofyou might have a different tolerance forfinancial discussions. Try to accommodateeach other's preferences when youdiscuss finances.

•Follow the KISS. Some spouses preferto leave most of the financial planningto their partner, but they also wantto be kept informed—a key element ofbuilding trust. Keep It Simple, Spouses(KISS). Provide brief, regular updatesabout investment performance and savingsand checking accounts to ensurethat you and your spouse have a commonunderstanding of your currentfinancial situation and progress towardyour long-term goals.

•Seek counseling. Just as with anyother issues couples might face, havingan experienced, neutral third party to listenand provide advice typically is helpful.A professional financial consultantcan take into account not only yourfinancial goals, but also your investmentpersonality (ie, your personal preferencesand comfort levels for such elementsas risk, how long you plan oninvesting, and so on). By recognizingeach individual's investment personality,it will be easier to map out strategiesthat make the most sense for you and toidentify how best to communicate witheach other about finances.

• Plan a set time. Most financial conversationsbetween partners take placeduring leisure time, especially on weekends,during dinner, and before bed.Jointly decide the times that work bestfor you as a couple and make it a regularpart of your routines during lessstressful times.

•Start early and stay flexible. Thebest time to figure out how to interactregarding finances is early in your relationshipto avoid falling into patternsthat don't please one or both of you. Butrealize that as time goes by, it may workbetter for your roles or the way you communicateabout finances to change.Check in with each other every once in awhile to see whether you need to updateyour financial routines.