Making wealth management decisions as a couple

When making decisions about your wealth and finances, how often do you and your spouse (or partner) work together as a team to arrive at a place where you’re both happy? Spouses report higher relationship quality and stability when they feel they are both involved in financial decisions and processes. Here’s a look at what you can do to ensure you and your spouse work as true partners toward your financial goals.

Why Teamwork in Finances Matters

There are numerous reasons why couples should make a concerted effort to address investment and financial issues as a team.

• Stronger Commitment to Goals: Couples who set goals together and are on the same page are more likely to mutually commit to shared goals, rather than goals dictated by one spouse.

• Reality Check in Stressful Times: During market volatility, even the best wealth plan can crumble if panic sets in. Acting as partners, you can help each other stay rational and avoid emotional decisions.

• Preparing for Longevity: Women generally outlive men, meaning many wives may eventually handle finances alone. Waiting until that moment to learn about family finances can lead to problems, even with good financial advice.

• Shared Risk and Responsibility: Even if one spouse is more financially savvy, both should weigh in on financial decisions. This reduces blame and resentment if mistakes occur.

• Stronger Marriage: Financial disagreements are a leading cause of divorce. Collaborating on financial decisions can alleviate money stressors and enhance relationship health.

Tips for Working Together

If you’re not currently consulting with your spouse on wealth management matters, or feel you could strike a better balance, consider these actions for more collaborative decision-making.

1. Boost Your Financial Smarts: If one of you has less investment knowledge, consider reading investment primers from reputable sources. Build confidence by understanding the basics before diving deeper.

2. Be Willing to Give Up Some Control: Collaboration requires compromise. If you’re the one making all the decisions, reflect on why that is and how you could better incorporate your spouse’s input.

3. Discuss Your Goals: When was the last time you compared notes about what you both want from life? Goals, both shared and individual, evolve over time. Regularly check in by listing your big goals, rating them in terms of importance and comparing notes. Clear, desired outcomes can help you make better decisions and compromises.

4. Clarify Risk Tolerance: Differences in risk tolerance can create tension. One spouse might prefer aggressive investments, while the other favors a conservative approach. To find middle ground, consider:

o Wealth Relative to Goals: If you’ve built enough wealth to achieve key goals, consider focusing on wealth preservation. Conversely, surplus wealth might allow you to invest more in stocks and handle volatility.

o Peace of Mind: If one spouse values stability over growth, consider adjusting expectations to maintain harmony. Discuss your priorities and arrive at a strategy you both find acceptable.

5. Enlist an Advisor: A trusted professional can help navigate crucial financial issues, cut through confusion, and focus on what actions align with your goals. Advisors can also facilitate discussions, ensuring both partners feel heard.

The Bottom Line

Like marriage, managing money is a partnership. Taking steps to collaborate on financial decisions can leave both spouses happier, healthier, and wealthier for years to come.

Thomas M. Dowling, CFA, CFP®, CIMA® is the Head of Wealth Management at Alliance Global Partners of the Lowcountry on Hilton Head. He can be reached at infohh@allianceg.com or (843) 420-1993.