I love power couples. When two strong-minded, confident people come to me for help with their financial planning, I know we’re going to end up creating a savvy approach to managing their money.
Not only do dynamic duos exude positive energy and confidence, the merits of each personality often compensate for their character flaws in each other.
That said, their strong-willed determination to be the best does not guarantee that power couples don’t experience power struggles or discord when it comes to money.
Why is money such a hot-button issue for power couples?
- Money is always an emotional and contentious issue for people who are uncomfortable discussing it.
- Part of the reason the topic of money can create tension is that each of us develops a philosophy of saving and spending based on our life experiences, which are influenced by family, friends, and peers. Since these experiences and influences are different for every person, our philosophies sometimes clash with our spouse or business partners.
- When the parents of one spouse instilled values of financial restraint and the parents of the other spouse adopted a “party like it’s 1999” attitude, reaching middle ground on this issue can seem all but impossible.
As a financial advisor, I inspire my clients to adopt the positive changes necessary for them to reach their life financial goals. Smart financial decisions can help them to adapt more readily to life transitions and move progressively closer to their financial goals.
Here are some strategies that power couples can keep in mind to avoid power struggles over money:
1. Don’t assume the process will be smooth sailing. Simply recognizing and accepting the reality that you aren’t going to agree on all aspects of any decision will lower expectations. Know, too, that while you can’t—and don’t want to—change each other, you can adjust how you communicate as a couple. Inflexibility and control often exacerbate the problem. It may help to consult a marriage counselor who can redefine the roles within your marriage. A CFP® professional can work with you to identify and clarify your mutual financial goals and help you develop a plan to help you reach them. If money has become problematic in your relationship, it often makes sense to consult with an unbiased third party.
2. If power is an issue for either person in the couple, rethink having a joint checking account. Couples who disagree on how to budget their money should think twice before commingling their finances. One good option is to maintain a joint account for all household expenses—including your mortgage, utilities, insurance, and groceries—with each spouse depositing a percentage of their paycheck into that pool. All remaining income can be directed to separate accounts, giving both partners their own discretionary fund.
3. Be sure to set aside some “mad money” for spa day or golf. Having that account helps folks stay on track because they know that every month they can do whatever they want with that money without having to be accountable for how they spend it. If you know you can have a little bit of fun in the short term, it can make saving for future goals more palatable.
4. Be transparent. Money troubles often arise when one spouse assumes the role of Chief Financial Officer of the household. An easy solution is to pay the bills together, sit down to discuss your budget regularly, and bring some transparency to how financial decisions are made. Transparency enables “spenders” to see for themselves that if they continue their spending pattern, they won’t be able to reach the mutual goals they established with their partners as part of the financial planning process.
5. Document and disclose. First and foremost: establish basic guidelines and structure for how you spend and save your money. Consider depositing income into a single account, managed by the more disciplined spouse. The more disciplined spouse, the “saver,” should then dole out a monthly allowance for discretionary expenses to the “spender.” It helps, too, for both parties to agree not to use credit cards for daily expenses and instead to move to an all-cash system, which gives “spenders” a greater appreciation for how much they’re spending. It may seem as though one spouse is relinquishing control, but as “spenders” observe a decrease in debt, their relationship with their “saver” partners will become more harmonious. Both spouses should document and disclose all expenses and develop a spending plan or budget. Once the “spender” demonstrates that he or she can maintain a budget, the “saver” can reinstate the “you, me, we” system of having one joint account and two separate checking accounts.
The Bottom Line
Just because your spending philosophy differs from your spouse does not mean you can’t experience marital bliss. As Ben Franklin said: “Diligence is the mother of good luck.” You can be lucky in love—by putting effort into being financially compatible with your spouse.
By investing the time in one another to discuss your common goals, share responsibility for the household finances, and communicate effectively, you can be a “power couple” in your own right by empowering each other to take charge of your financial lives.
Healthcare Stocks: Invest in Business, Not Science
5 Marketing Strategies for Advisors to Ensure Growth
Why Ray Dalio Is Wrong on Capitalism
Establish That Perfect Combination and be Unforgettable
Don’t Get Stuck With a Bad Annuity
What Does Discipline Mean to You?
Can You Take a Punch?
Let Your Audience Know How Unique You Are
Things We Don’t Talk About
What a U.S. Rate Cut Could Mean for Gold Prices
Permission to Succeed11 hours ago
A Liquid Commodity for Diamonds with Cormac Kinney
Building Smarter Portfolios11 hours ago
Why Insured Municipal Bonds Make Sense Today
Advisor Marketing11 hours ago
Why You Should Treat Your Content Like Atoms in Financial Services
Development2 days ago
Do You Understand the True Value of Advice?
Advisor Marketing2 days ago
How Often Should Financial Advisors Blog?
Leadership2 days ago
The Hidden Leadership Problem with Passion
Development3 days ago
Changing Forward Means Silencing Your Inner Gremlins
Research3 days ago
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks