Whether you’re a newlywed or have been married for decades, navigating marriage and money can be tricky. We all know that communication is key, but some of us don’t exactly know how to communicate. This is especially true with the topic of money, which is (sadly) often taboo.
The Money Guys recently stumbled across some disturbing trends uncovered by Fidelity’s Couples Study that proves this is true: 48 percent of couples are unaware of how they’ll continue to afford their current lifestyle in retirement. 47 percent aren’t sure how much money they’ll need in retirement. 60 percent are lost when it comes to how much of a paycheck they’ll receive from Social Security.
The headline “American Couples Worrying More, Planning Less” doesn’t seem to make sense, either. The best way to alleviate worry is to create a plan, which is illustrated perfectly in Fidelity’s study. Couples that had a retirement plan in place had more overall confidence in their ability to retire, but only 21 percent of couples surveyed have bothered to create one.
Not surprisingly, the advice of the couples who were surveyed was to start saving for retirement early on, and to make joint financial decisions. How can you do that without a plan? Brian and Bo are here with some tips.
1. Merge Your Worlds
You don’t want to have colliding financial plans between the two of you. You and your spouse need to be on the same page, or as close to it as possible. You also need to be understanding of where your spouse is coming from. If you were raised with different financial backgrounds, you’re going to have different financial habits. Make sure communication stays open when creating a spending plan, and refrain from judging each other.
Additionally, we know paperwork can be boring, but it’s important: update all your policies. If you just got married, list your spouse as your beneficiary, look into getting life insurance (even if one of you stays at home), and talk about your vision for retirement.
2. Realize Money Can Sometimes Buy Happiness
Is your time so limited, you can’t enjoy a date night or two during the week? How much is quality time worth to each of you? You may find it’s worth hiring a few tasks out, especially if chores are getting the best of your household. We’re all about being frugal, but you need to use your time and resources wisely, too.
3. Don’t Let Outside Voices Influence Your Relationship
Are friends and family constantly butting into your relationship? Are they telling you how things “should” be done? It’s all well and good to receive advice, but you need to recognize that each relationship is unique. What has worked for other couples may not work for you, and that’s okay. Consider the advice you receive, but frame it in the context of your relationship, and evaluate the advice from there.
4. Big Team, Little Me
Marriage means working as a team. There’s not much room for selfishness. That goes for finances as well. If one spouse is working, and the other is staying at home watching the kids, the spouse who’s working should not feel entitled to all the money, even if they “technically” earned it. The stay at home spouse is still dedicating time and a lot of energy to watching the children.
Have mutual respect for each other and the roles you fill in the relationship. Getting a joint bank account may be a good idea, as “what’s mine is yours and what’s yours is mine” can be put into action.
5. Plan at the Next Level
Have you and your spouse been managing your finances well by yourselves? If so, it may be time to consider planning your finances at the next level. We mean going pro. Hire a fee-only financial advisor to help you craft a foolproof retirement plan and estate plan, to update your beneficiaries, and to know where your money should be invested. It always helps to have a second set of eyes looking things over.
Beyond that, if you’re the money manager in your household, and something happens to you, having a financial advisor to help your spouse afterward will alleviate a lot of stress and uncertainty for them.
Marriage and Money Don’t Have to be Complicated
Managing your money with your spouse isn’t that difficult if you’re both okay with discussing your thoughts and feelings on the matter. Get together and talk about the big picture and what you can do in the present to achieve your goals. Working together and being aware of what the other wants out of life will give way to creating a retirement plan, which will serve you well not only in the later years of your life, but in the immediate future as well.
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