|
Cents and Sensibility Guy Steele |
When investing, get on
‘same page’ as spouseCommunication is the key to successful marriages. But a surprising number of married couples may think they communicate well, only to discover that they have radically different ideas about one of the most important aspects of their life together -- their money.
At least, that's the finding of a recent research project completed by the U.S. Bureau of Labor Statistics. The study showed that men tend to estimate the family income 5 percent higher than wives. And men view their family wealth -- stocks, bonds, home equity, etc. -- as 10 percent higher than wives do. Also, wives believe that family debts are about $500 higher than husbands.
This "disconnect" could lead to problems when it comes to making important savings and investment decisions. For example, husbands, operating under inflated assumptions of income and assets, may be more inclined to spend, rather than save. Conversely, wives, concerned about higher debts and lower income and resources, may favor more conservative investments. In fact, other studies have shown that this may well be true.
Of course, in anyone's individual situation, it might not be particularly helpful to generalize on how husbands and wives think differently about savings and investing. Nonetheless, to make sure you and your spouse are working together toward your common long-term financial goals, you may want to consider the following suggestions:
>> Review your finances regularly -- Don't assume that you and your spouse know exactly the same things about your income, savings and investments. Take the time to "put all your cards on the table." And do it regularly, because things change all the time -- one of you may get a raise, one of you has noticed something unusual in your investment statement, etc. If you work with an investment professional who conducts regular reviews of your financial situation, you and your spouse have the perfect opportunity to scrutinize the same information.
>> Discuss your goals -- With careers, kids and all the activities of everyday life, you and your spouse may not have a lot of time to discuss topics such as retirement, college funding and other long-term financial goals. But you need to make the time. If you each have different conceptions of your ultimate financial destinations, you'll have a hard time agreeing on the proper strategies for getting there. Make sure each of you knows when the other would like to retire, what sort of retirement lifestyle you envision, what kind of contributions you're thinking of for your children's college education, etc.
>> Reach common ground -- If you and your spouse have different investment personalities, you may well have to find some "common ground." That is, if one of you is an "aggressive" investor, while the other is "conservative," you might have to chart a course that is considered "moderate." If one of you is unhappy with the way you are investing as a couple, than nobody really comes out ahead.
>> Keep your records accessible -- In some marriages, one partner manages the finances so completely that the other spouse doesn't even know how to find the investment statements, tax records and other documents. That is a recipe for disaster -- if something were to happen to the "in-the-know" spouse, the other one could face big delays in taking control of much-needed assets. By following these basic suggestions, you and your spouse can work together to make continual progress toward your objectives. And, as you know from any endeavor in life, any job is easier when people pull in the same direction.
See the Columnists section for some past articles.
Guy Steele is a financial planner and head of the Pali Palms office of Edward Jones. Send planning and investing questions to him at 970 N. Kalaheo Ave., Suite C-210, Kailua, Hawaii, 96734, or call 254-0688
