It’s very common for a married couple to have vastly different financial personalities. One may be frugal and the other a big spender. As we all know, money can be the source of some pretty big challenges in a relationship.
In fact, a recent survey revealed that 73 percent of couples said their financial approach differed from their partner’s. Thirty percent of couples argue over finances at least once a month, and 5 percent admit to having their own individual account that their other half doesn't know about.
While you could say arguing is just another form of communication, there may be better ways of conveying money matters in a relationship. For example, many couples set a maximum amount that each partner feels he or she can spend without consulting the other. This survey discovered the average sum is $400. However, that amount is lower with millennial couples ($100) and higher among baby boomers ($500). Interestingly, 21 percent of couples don’t know how much their significant other has in his or her personal retirement account, such as an employer 401(k).
Traditionally, employers have provided the means for retirement income or savings vehicles but not offered much guidance in preparing for retirement. While more are making a concerted effort to help workers understand how much income they’ll need during retirement through various tools and resources, it’s important to work with your financial professional to build a retirement income strategy tailored specifically to your household’s needs and objectives.
If you and your significant other haven’t really thought about your different approach to finances, an assessment might help alleviate some stressful situations where money is concerned. While it’s not an exact science, you also may consider taking any of the many free online quizzes to see how the two of you differ in regard to your financial personality.
Older couples may be less prone to argue about how to spend their money, but that doesn’t mean they’re any more compatible in their financial personalities or that they experience any less money-related anxiety. It often means they’ve settled into their respective roles and let the status quo take its course. However, it’s important to discuss upcoming events such as when to retire, where to live and how much money may be needed to maintain their lifestyle in retirement.
However, couples shouldn’t be so focused on retirement finances that they don’t account for the possibility of new adventures. One of the first determinations is to ask yourself -- how do you want to spend your retirement? Where do you want to live or travel? What sort of activities will you want to pursue? Are there any big-ticket items, such as starting a new business venture? All of these questions help you determine the amount of income you’ll need, so it’s a good place to start.
Interested in reading more? Here are some articles that may be of interest to you:
[CLICK HERE to read the article, “The Secret to a Good Marriage Might Be Keeping Small Financial Secrets,” from Bloomberg. Sept. 21, 2016.]
[CLICK HERE to read the article, “2016 Hot Topics in Retirement and Financial Well Being,” from Aon Hewitt. 2016.]
[CLICK HERE to read the article, “Myers-Briggs Your Wallet: Learning Your Financial Personality Could Be the Key to Fixing Your Money Woes,” from Forbes. March 4, 2016.]
[CLICK HERE to read the article, “Older Couples Face Money Battles,” from Kiplinger. May 2016.]
[CLICK HERE to read the article “How Couple Can Retire in Harmony,” from Kiplinger’s Personal Finance. September 2016.]
[CLICK HERE to read the article, “Thinking Beyond Money in Retirement,” from The New York Times. April 22, 2016.]
Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app.