Beyond the Numbers Financial Advisor eNewsletter
Money Talks: discussion Strategies for couples
Establishing good financial communication skills can be part of the secret to a happy marriage or partnership. In fact, studies have found that couples who talk frequently about money matters are happier than couples who don’t.1 But this doesn’t mean talking about money is easy. Conversations about money can sometimes be awkward and emotional. Below are a few strategies that might help make your clients' financial conversations more productive, motivating, and even fun.
1. Lay the groundwork.
Early in a relationship it is helpful to open up about the basics of your finances. What savings, investments, or debt does your "client couple" have? Do they have good credit? Answering these types of questions can help both of them get on the same page. It can also be helpful to openly discuss the fundamentals of how you want to manage your bank and investment accounts. Some couples keep separate accounts, others put their money together, while still others have both separate and combined accounts. Based on their credit ratings and budgeting and spending strategies, your clients may need guidance to determine the approach that best meets their needs.
2. Have a heart-to-heart talk.
A lot of how we feel and act around money has to do with our upbringing and past experiences. Some people spend more because they had little money growing up. Others have cautious investment strategies because of bad investing experiences earlier in life. Having an open and honest conversation about financial feelings, hopes, and fears help your clients overcome emotions that sometimes complicate financial decisions, and empower them to be a happier and more successful couple as they work toward your financial goals together.
3. Establish your financial goals.
Determining together their most important financial goals—whether it’s buying a second home, paying for their children’s education, going on your dream vacation, retiring early, or simply having more financial freedom and less stress—is an important step to financial success. Setting spending strategies and measurable milestones on your way to achieve these goals can help you stay on track. Your clients will benefit from help to both prioritize goals and set a course to achieve them.
4. Determine roles.
Many couples fall into financial roles by default. Sometimes, for example, one spouse will take the lead on budgeting and the other will make most of the investment decisions. Some couples will occasionally switch which spouse is responsible for what. Sometimes one spouse will take on most of the financial and investing decisions, while other couples will share financial responsibilities equally. Interestingly, while women have traditionally taken charge of household budgeting and men have led investment strategies, the opposite approach may be better for some couples. Research shows that women often outperform men in investment returns, while men, less prone to impulse buying, can sometimes maintain a more frugal family budget.2 Regardless of your clients' approach, choosing roles based on their respective strengths and interests can help them become the best possible team.
5. Have money dates.
Keeping on track requires regular check-ins and discussions, but just because your clients are talking about money doesn’t mean it can’t be fun. Scheduling regular money dates with spouses can be a stress-free way to get on the same page and talk about their goals, hopes, and worries. Some couples might have a discussion over a bottle of wine at home, others may have their money dates at their favorite romantic restaurant, while some couples may plan an annual weekend getaway. It’s important to have a positive and honest conversation so that they can be an effective team tackling your financial priorities. Money dates can be a good time to review goals and long-term priorities. Then, they can check in on their finances and look for unexpected expenses and assess your financial progress. Your clients may want to have a money date shortly before meeting with you so that they can identify priorities and topics they need to address during your meeting. Financial discussions don’t need to be lengthy, but they can be great for clearing the air, aligning goals, and identifying areas for improvement.
The ultimate goal for your clients is to achieve the life both of them want. You can help them recognize that their financial journey will include mistakes and course corrections, and encourage them to approach their financial conversations with patience and openness.
This article is a publication of Life Stage Insights, a client discovery and engagement system for financial advisors.
1. Washington Post, "Couples are happier when they talk about money." September 19, 2016
2. CNN Money, "Fresh evidence women are better investors than men." March 8, 2017