Do you remember the first financial conversation you had with your spouse? Maybe it took place before you even exchanged “I Dos.” If you lived together before marriage, these conversations may have been about sharing expenses, paying bills, and more. Discussions about finance in marriage could be about funding household projects, running a joint venture, planning vacations, and more. Sometimes, discussing finance in marraige can even lead to financial discontent.
But, chatting about how to fund your shared vision for the future can bring you closer together. What’s more, talking about finances in marriage is something you absolutely need to do. Here are three C’s couples should plan to address in order to head off or overcome financial discontent in your relationship: collaborate, communicate and control.
Hard money conversations can be difficult, which is why for many couples financial conversations aren’t the norm. In fact, many people believe that money is a taboo topic, even when discussing it with their spouse. For example, only 57% of couples surveyed communicate about debt well, yet 67% argue about money, according to Fidelity Investments’ Couples & Money Study. Debt is as common as it is fraught: more than half of married couples carried debt into their relationship and 55% of couples feel responsible for helping pay off their spouse’s debt. Retirement is another contentious topic, according to the survey, with 54% of couples disagreeing on how much money should be saved by retirement age.
There are many external factors that can impact financial sharing between couples and cause financial discontent, such as the economy and the changing nature of work. Stock market volatility is another factor outside couples’ control that affects those who rely on stock option compensation or securities as a source of income. As more workers participate in today’s project economy, this influx of independent and freelance workers find their incomes fluctuating from month to month and year to year, as assignments flow in or dry up.
The extent of contract work is staggering and on the rise, with an NPR/Marist poll finds that one in five U.S. jobs is held by a worker under contract; within a decade, contractors and freelancers could make up half of the U.S. workforce. The boom or bust nature of compensation for these workers makes financial planning harder and communication ever more necessary.
Setting aside disconnects around basic questions like salary, there are many other topics that demand active communication and cooperation to keep finances in marriage on track:
Taking time to plan increases your chances of creating a strong foundation for the future, increases peace of mind and has the additional benefit of improving your chances of reaching your financial goals.
Building a strong foundation for finance in marriage is key to tackling money-related challenges. And, the best way to bolster your family’s financial footing is to follow the “Three C’s”: Communicate, Collaborate and Control.
Even if a relationship has cracks in its financial foundation, it’s never too late for couples to get back on track. From simple budgeting to long-term retirement planning, taking control can be as simple as communicating and collaborating on goals for the future.
[Editor’s Note: To learn more about this and related topics, you may wish to attend the following webinars: Estate Planning and Asset Protection 101, and Investing Basics 2018. This is an updated version of an article that first appeared August 5, 2015.]
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Head of Wealth and Asset Management at Figure, a San Francisco Bay area financial technology company with the mission of leveraging blockchain, AI and advanced analytics.
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