Why Your Married Clients Should Share Financial Details with One Another
Most people tend to know more about their spouses than they do anyone else. Who hogs the covers in bed. Who is a night owl with a fondness for cheesy 1980s sitcoms. Who knows all the words to “Me and Bobby McGee.”
These details and inside jokes are the spice of your clients’ strong relationship.
One area in particular, however, can be a source for strife, anxiety and arguments: family finances. Both spouses should have a basic understanding of their financial situation. The Wall Street Journal recently cited a Fidelity Investments study that found only 28 percent of couples were confident that either spouse was prepared to manage their joint finances alone. (http://tinyurl.com/n3cca8w)
Bridging that gap is a tall order, but it can be.
For richer or for poorer?
Of marriages that end in divorce, more than 50 percent of the splits list financial disputes as the main reason, Forbes says. (http://tinyurl.com/mm9qx5g)
What’s more, 27 percent of Americans say financial disagreements are most likely to bring about an argument, U.S. News reports. And a Utah State University study found that couples who disagreed about money once a week were twice as likely to split as those who differed less than once a month. (http://tinyurl.com/lx3qzdj)
Understanding each other’s money personality is key because in most relationships, one partner is a saver while the other is a spender. Instead big investments, it’s often everyday decisions that bring about most arguments.
Besides divorce, disability or death can thrust new responsibilities on spouses who are ill-prepared to deal with financial problems, The Wall Street Journal says.
There’s a tendency to put off tough conversations because in talking about what would happen if one of your clients was gone, it means your clients must face their mortality.
The Journal’s advice for getting couples on the same basic financial page starts with listing assets. Make sure to note account numbers and passwords. When clients know what they have, it’s easier to make a plan.
From this basic info, talking about how your clients want their assets distributed is the next step. Coming up with a disaster plan shouldn’t be overlooked, The Journal says, to prepare clients for bumps along the road to retirement.
The New York Times also has suggestions for how to keep finances from being a source of conflict and instead a point of communication. They include taking about education goals for kids; deciding where to live; talking about vacations and the budget for them; and reviewing retirement expectations. (http://tinyurl.com/q52scxr)
The Times and U.S. News agree that establishing a budget and/or spending threshold is one of the most important things clients can do. And to keep harmony, don’t make that budget a set-in-stone absolute; allow for some wiggle room that accounts for small discretionary purchases.
With all this advice put into practice, your clients can have a happy, healthy, financially open relationship.
We hope this information was useful to you, your clients and their families. To get more information regarding this or any related topic, please visit our website www.TEPLG.com or call us at 630-871-8778.
Tags: estate planning