How to Money Proof Your Relationship

How to Money-Proof Your Relationship!

“Money fights predict divorce rates,” says the New York Times. 80 percent of couples fight about money, says a 2014 Money Magazine survey. Research from American Express revealed that 91 percent of couples avoid talking about finances, and only 43 percent discussed money before marriage!

The good news is: not all couples fight about money. The happiest couples have learned to communicate about money and manage it positive ways. Below are some points that will give you tools and advice to increase the chances that your relationship will be a happy one!


#1: Schedule talk time.

Money is not a topic that gets easier the longer you ignore it. Even if your finances are in excellent shape, it doesn’t benefit one partner to be “out of the loop” if the other is managing the household finances and investments. (Actually, this is a recipe for disaster if the household finance manager dies or becomes disabled, or the couple gets divorced.)

According to a 2016 Ameriprise study on money and couples, here’s what accounted for the majority of financial disagreements:

  • Major purchases (34% of couples clash about this at least once a month)
  • Decisions about finance and children (24% of respondents with kids disagree on this),
  • A partner’s spending habits (23% argue about this), and
  • Important investment decisions (14% of couples disagree about this).

#2: Have regular financial check-ups and check-ins.

Talk is great, but make sure you’re not neglecting the numbers! Do a regularly scheduled review of your finances, in black and white. It’s important that you SEE a snapshot of your family’s financial picture. Whether you use, Quicken, Quickbooks, Excel, or even simply bank statements, monitor where your money is going and what it is doing.

It’s not necessary to go into great detail, but it IS important to get an accurate snapshot of your finances so both partners understand what’s happening with their money.


#3: Understand your partner’s financial priorities.

They’re probably different from yours! You can even have the same money style, but very different financial priorities. One partner may wish to purchase a new car every two or three years, while the other would prefer to spend money on travel. One might enjoy fine dining, and the other would rather have a hot dog at a major league baseball game.

There is no “right” or “wrong” answer; it’s all about understanding priorities. Hopefully you can agree what is a “need” and what is a “want.” Then, once the necessities are covered and saving mechanisms are in place, try to have flexibility with each other’s preferences. A few compromises can help you both feel like you’ve been heard.


#4: Saving saves more than money; it saves families, too!

Many couples have conflicts about money because they don’t have too much money at the end of the month! Some couples have conflicts because the partner making the investment decisions took risks that didn’t pay off. There are hundreds of things that can increase a family’s financial stress, and one sure cure to lower it: saving money.

Some of us have taken vows to love each other “through good times and bad… for richer or poorer.” But we all know that “for poorer” can be a difficult road, and financial stress is a challenge for relationships. When a couple has a healthy emergency fund, they can handle unexpected expenses, income interruptions or an economic downturn in stride. When cash is low, anxiety runs high. So protect your relationship by saving regularly and protecting your money!


#5: Prepare each other for worst case scenarios.

A smart way to save is with high cash value whole life insurance, because it will help you save regularly, with flexibility when needed. Gains are locked in to weather economic storms or market crashes. It will help you create a sizable fund for both emergencies and opportunities. And perhaps most importantly, permanent life insurance leaves each partner protected in worst-case scenarios.

Losing a partner (as well as a child or parent) is devastating, and when actions aren’t taken to protect the surviving partner from financial disruption on top of emotional losses, something critical is missing from the family’s financial strategy. Just because you promise to love each other “til death do us part” doesn’t mean you shouldn’t care what happens to the survivor when—sooner or later—death actually parts you.

And for some couples, parting doesn’t happen quickly. There may be disability to contend with, long-term care needed, or a terminal illness. There are whole life insurance riders that can help a couple prepare for ALL of these possibilities, without taking a risk that money will be “lost” on long-term-care plans if not needed.


Couples and Money: The Bottom Line

How we handle our finances can be an expression of our love for each other. It can build trust, increase communication, help us become more disciplined, more understanding, and think long-term about our relationship. Stressed about money and not how to communicate about it? See it as the grand opportunity that it is!

Finally, get and take the advice of your trusted advisors to guide you through financial land mines. Whether it is an investment strategy that won’t leave you fretting about the market or life insurance policies that prepare you for both the good and the bad, we are here to help!