Financial planning for couples is a wonderful and exciting challenge. With two unique viewpoints, needs, goals, and priorities finding the right balance to respect and enhance both partner’s visions is an important task.
Here at TFS, we serve many clients who are married or have long-term relationships and have discovered some important tips for couples to help improve their financial plan together.
Financial planning has a lot to do with money, but even more to do with relationships. How a couple functions together, views their financial landscape, and applies financial planning into their daily lives is just as important as net worth, taxes, investments, and saving for the future.
Today, our team will dive into some of our top tips to help enhance the way that couples approach financial planning together.
Be engaged
We don’t mean engagement in the sense of saying “I do,” but that works too! When we talk about engagement we mean both the attention and intention of both parties to participate in the financial planning process.
Engagement is one of the most important aspects of bringing a financial plan to life. We can give all of the advice we want but if our clients aren’t actively engaged in the process, nothing will get done.
The same principle applies to relationships in general. In order to have a fulfilling, lasting relationship, you need to be engaged with your partner and in tune with their thoughts, feelings, values, and actions. When you devote this energy to your relationship, you will find that most often it will strengthen your bond.
It is equally important for both partners to actively participate in their financial plan. Most often we see that one partner is more attuned to the household finances than the other which can negatively impact the overall execution of the financial plan. Alignment of your goals to your values is a conversation necessary to pursue the best outcome for your family.
With retirement planning specifically, it is best that both members of the relationship are involved with their planner. For retirees, most likely one spouse will outlive the other, meaning that both spouses need to understand how their financial situation is organized, set up, managed, and executed. When both spouses aren’t on the same page, that can lead to confusion and frustration.
Special focus on retirees
Planning and preparing for your ideal retirement takes many years of careful planning, experimentation, flexibility, and honesty to get right. Both partners need to be involved in this process so they understand not only how they want to spend their time but also how their cash flow will change, where their investments are held, their charitable giving strategy, tax plan, as well as the ins and outs of their estate plans.
Too often we find one spouse, often the male, takes the reigns in the financial elements of a couple’s retirement plan. This becomes an issue especially in longevity planning, as many women outlive men often by about 6-10 years which is a significant amount of time to plan for. We never want someone to face the additional burden of trying to learn their financial plan while also dealing with the loss of a loved one.
This is why we make it a priority for both spouses to be actively engaged in our financial meetings, as it brings an added commitment to their financial wellbeing as a couple.
Voice your opinion
While one person may feel more confident speaking on financial matters, it is important that both people are able to express their opinions, questions, comments, and concerns about different aspects of their financial plan.
When you are participating in the conversations it better helps our team create a plan that has both of you in mind. Each partner brings something special and unique to the conversation, elements that we want to include in your planning strategy. But we can’t do that without equal participation and creating a welcoming space where both people feel comfortable and confident expressing themselves.
Perhaps one person wants to move to a different state in retirement, or split time between two, and the other spouse hadn’t thought about that at all. By openly expressing these thoughts, we can help look into the financial and lifestyle changes that would have to occur in order to make that vision happen. The earlier those goals are expressed the better because it will give us time to shift your financial goals and priorities to help you and your partner pursue your specific goals.
Respect your partner’s vision
You and your partner will probably not agree on everything and that is okay. As long as you approach those differences from a place of curiosity and respect, you will be more likely to come to a compromise that works for both of you.
Maybe you have always wanted to take a slower pace in retirement and your partner is passionate about an encore career. You may have always dreamed of taking a full month to travel to Europe and your partner’s passport has long expired. The point of having these conversations is getting an idea of what each of you wants and different ways to make that happen.
Set goals and priorities together
Most of the time we find that couples have similar goals, but they have a different way of getting there. Both people might have different learning styles, communication preferences, and are focused on different elements of the financial planning process. That is all okay. It is even healthy to know the strengths that both you and your partner can bring to this process.
Your financial goals as a couple should be representative of both your and your partner’s shared vision for the future. While you may not agree on everything, knowing where your partner is coming from can go a long way in the planning process.
In the midst of all the changes going on in the world due to the Coronavirus, maybe now is a great time to reevaluate your goals as a couple. Take time to look at your financial plan and ask
- How will our goals help get us where we want to go?
- Are our goals realistic?
- What changes need to be made to have our goals best represent where we are now?
How TFS can help
We love working with our clients to help them use their money in a way that enhances their lives and the lives of those around them. Couples, in general, have an important responsibility to both be invested in the creation and ongoing management of their financial lives. Our team can help you identify your values which bring life to your goals and actions.
That may be tough when one person has historically managed this themselves, but we find that couples have greater confidence in their plans when they each contribute to it. We would love to meet with you to talk more about shifting your financial goals and priorities to best reflect you as a couple. Set up a time to talk with us today.
