Keeping the Spark Alive: Financial Communication Tips for Successful Couples
When was the last time you and your partner or significant other had a fun, relaxing talk about … money? If you’re like many couples, that sentence may have sounded like a world-class oxymoron. That could be the reason that many couples avoid the topic altogether. In fact, according to Fidelity’s 2021 Couples & Money Survey, 48% of respondents disagree on the age they plan to retire, and 51% disagree on how much savings is needed to retire. On the flip side, those who said they communicated well and regularly about money are more than twice as likely to have expectations of a comfortable retirement lifestyle.
Though financial conversations in marriage can be uncomfortable, most experts agree that clear communication around money matters is the best antidote against the type of stress that can result in arguments about money or even divorce. That’s why having a strategy around how to talk about money with—and, maybe even more important, listening to—your partner in matters of family finance is so vital.
Breaking it down even further, here are three areas where we found it especially important for both partners in a relationship to be on the same page.
Are Our Goals Aligned? Even for couples with ample financial resources, money conflicts are common, and a major source of financial discord can arise when spouses are on different pages about long- and short-term financial goals. While it is almost certain that you and your spouse will not see eye-to-eye in all areas, open and honest communication can help you achieve mutually agreeable decisions for important financial objectives such as retirement, education funding, philanthropic efforts, and estate planning. Because aligning your goals is such a critical step in establishing a firm foundation, it is important to dedicate time to have an in depth conversation(s) with your spouse about what you’d like to accomplish together and what type of legacy you’d like to leave for your heirs and organizations that are important to you.
Staying on Track. Discussing and establishing shared goals is a great starting point, and this is often when the financial planning work begins. Once you have identified your goals, and created a plan for reaching them, it is important to schedule time at regular intervals to review your goals and see if you are on track. Just as important as monitoring your progress, it is important to discuss how you will handle potential hurdles that could derail your plan. For example, if you are off track you will want to discuss what resources you will need to get back on track, and how you will decide to do so.
This is also an area where the guidance and perspective of a fiduciary financial advisor can be invaluable. At Quantum Financial Advisors, we have tools that can help you clearly understand your progress and confirm that you’re on track for success. We can also work with you to develop and evaluate scenarios that can help you find ways to regain momentum if you find yourself lagging in certain areas or realign goals that may have shifted.
Risk Management. We all know that life is full of uncertainties, and just as important as it is to prudently grow your wealth it is important to protect your wealth. As a couple, you should also periodically discuss what are the risks you have in your financial, professional, and personal life. For example, do you serve on the board of a non-profit? Or, do you often host parties at your home? Or, do you have a partnership that requires the funding of a buy-sell agreement? These are just some of the many risks that require mitigation through insurance and sometimes even the use of different legal structures. Without an intentional plan to review these items, it is very easy to leave these risks open to chance. So, when you meet as a couple to discuss the family finances, also remember to review and evaluate your activities and see which ones may pose a risk to your wealth, then update your coverages and legal arrangements as needed.
At Quantum Financial Advisors, our goal is to help each client find the right financial balance that leads to success—on their terms. We understand that individuals learn and communicate in different ways. That’s why we take the time to discover individuals’ learning styles and craft our communication to address both parties by translating the numbers in a way that is a common language that couples can use to discuss and arrive at goals. To learn more, read our recent article, “Your Best Retirement: Making It About What Matters Most to You.”
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