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Why Hiring a Financial Advisor Could Be Good for Your Marriage

The Wall Street Journal recently published an article entitled, How Couples Can Resolve Their Biggest Fights Over Money, which points out, as most couples are well aware, that money is one of the biggest sources of marital conflict.  The primary expert cited in the article, financial psychologist Dr. Brad Klontz, discusses how, in many marriages, one spouse tends to be more of a saver and one tends to be a spender and that these predispositions are often rooted in fears and emotional baggage related to money that date back to childhood.  While uncovering and listening to these fears is obviously central to diffusing the conflict, Dr. Klontz also advocates the pragmatic approach of setting savings goals and seeking compromise on how to achieve them.

And this is where a financial advisor can help.  The process of developing a financial plan encourages couples to discuss and outline their financial goals.  This includes determining the timing and amount needed for short-term goals, such as new cars, vacations, and home renovations, as well as long-term goals, such as retirement, college funding, a house purchase, etc.  The financial plan provides an opportunity for couples to discuss the alternatives and establish and prioritize their goals together.  For example, one couple we know recently decided that their primary goal was to buy a boat in retirement because they love spending time together on the water, and they were willing to downsize their home and delay retirement by a year to reach that goal.

Furthermore, this experience helps bridge the gap in relationships in which one person is generally in charge of and comfortable with the family finances and investments and the other is not.  Working on a financial plan and building a relationship with an adviser together can empower the less involved spouses and help them feel comfortable about their future if something happens to the currently more involved spouse.

The financial plan process also provides guidance on the necessary steps to reaching financial goals, which could help mitigate tension between the spending spouse and the saving spouse.  Once a couple has outlined their goals, we advise how much they need to save (and through what vehicles) in order to get there.  If clients are meeting their savings targets, then the “saver” can feel free to enjoy spending the rest, and if they are not meeting their savings targets, then the “spender” can see that further restraint is required to meet their goals.  In either case, having an objective third party involved might lessen the tension, since both spouses can feel free to throw their financial advisor under the proverbial bus:  “Honey, the plan says that it’s okay/not okay to spend this much in light of the goals that we set together!”

While single individuals may not experience this tension with a spouse, the primary benefits of having an advisor develop (or update) a financial plan still apply in that they are forced to think through and prioritize their financial goals and then are able to enjoy spending extra cash flow guilt-free when they know that they are saving enough to achieve those goals.

     
 

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