comprehensive financial planning checklist marriage PAX Financial Group

Marriage and Money: 5 Tips for Making it Work

Financial Planning, financial advisor San Antonio Feb 4th, 2020 by: Darryl Lyons

Marriage is a partnership made of two people who may have very different approaches to money. 

At PAX Financial Group, we work with many couples where the spouses are on different pages financially. It’s common to see one a saver and the other a spender, for instance, but in other situations, it can be the extreme. The husband may enjoy starting each day by checking yesterday’s portfolio returns, while his wife averts her eyes for fear of seeing a loss. Couples often vary in their risk tolerance, too. And in their plans for retirement – the husband may want to spend his Golden Years skiing, while his wife wants to see the beach at sunset. 

Couples can also have differences in their family background and the finances they brought into the marriage. Was your spouse raised in a family with little disposable income while yours was comfortable, or vice versa? Is one spouse deeply in student loan or credit card debt, and the other not? In these situations, spouses can have very different feelings toward money

These differences can make a marriage tough, but the good news is, it can be done. The key is getting on the same page about money and finance. While marriage may primarily be about love, family and companionship, it is also about money. If you have a mortgage and assets, your spouse is highly likely to have a say about them. Spouses need to have an agreement about where their cash flow goes.

When spouses can’t agree on money and related issues, like spending and assets, it can be a recipe for a chronically unhappy marriage. Money plays a role in everything we do, from buying groceries today to retiring three decades from now. It’s important to either agree or be comfortable with disagreement and manage it appropriately.

Below are 5 tips for getting on the same page about money in a marriage – a comprehensive financial planning checklist for marriage, if you will.

 

Contact PAX Financial Group to see how we can help you establish a financial plan that works for you.

 

1. Discuss Your Money Styles Openly

It’s not uncommon for spouses to have very different approaches to money. One may love to shop and spend, while the other is happiest saving. One may keep spreadsheets of cash flow expenditures each month, while the other has no idea how much is in any bank account, ever.

It’s important to know and discuss your money styles. If you don’t, it’s like rafting a river while having no idea where whirlpools may be. Don’t expect a shop-and-spend spouse to save only and be happy about it. 

It’s important to have a workable system to manage your money styles. If one spouse is a spreadsheet aficionado, perhaps that person will be unofficially in charge of money. But it’s also important not to have negative judgment on money styles. Saving and spending can be equally valid approaches; you just need to know how you and your spouse approach money.

 

2. Agree on Long-Term Goals

A large part of financial planning is defining long-term goals. Where do you see yourself several years or decades down the road? Think about and answer these questions with your spouse. Why? Because if these long-term plans have a financial component, your financial plan needs to work toward them.

Think about goals in every aspect of your life. Do you eventually want a large house, for instance, or a second home? Are you saving for your children’s college fund? Do you have significant debt and want to be out of it? Do you want to start a business? When do you want to retire – and do you have a sense of how much you will need in your retirement nest egg? Do you want significant vacations abroad every year? 

Spouses should be in agreement on these goals, so they are both comfortable with the goals and working toward them compatibly.

 

3. Plan Short-Term Objectives

Long-term goals are achieved via a series of short-term objectives. 

If you want a larger or second house, for instance, you will likely need to save for it. You’ll need to earmark a certain amount to put toward a children’s college fund if that’s a goal. If you want to be out of debt, how much can reasonably be put toward debt service while taking care of your needs? 

The same is true of starting businesses, retirement plans and vacations – you need to know how much disposable income or assets you need for your life goals, and have a plan for how you’ll get there every month and every year.

 

4. Manage Differences

Instances may arise when you don’t fully agree on goals, short-term objectives or their priority. Perhaps you want to visit Japan for next year’s vacation, while your spouse wants to see castles in France. Perhaps your spouse sees educational savings for children as far more important than a larger house. Your spouse may have early retirement as a goal, while you love your job and want to start a business doing it.

You also need to manage different styles and approaches to money. If one spouse is a spender and the other a saver, it may be appropriate to have separate bank accounts. Many couples keep both separate and joint accounts for different purposes. 

The first step to finding a middle ground is open discussion, without rancor or judgment. Then, you need to establish the best way of managing these differences. A financial advisor can help in this process. An outside, unbiased opinion can offer the support needed to find a common goal.

 

5. Review Plans and Finances Periodically

It’s important to review your plans and finances periodically. Are your plans still what you want? Have they changed, or have circumstances modified them?

At least once a year, review your cash flow, both actual and projected, along with savings and goals. Do you have more than planned, due to stock market returns, large bonuses or some other factor? Do you have less? In either case, make a plan for it.

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

 

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.