Why Married Couples Should Talk About Money Before They Have To

Every person enters a marriage with an existing relationship with money. Long before two people combine their financial lives, their attitudes about saving, spending, debt and financial security have already been shaped by their individual experiences.

Understanding those differences can be an important part of financial planning as a couple. The problem is that many couples don't talk about them until they're forced to make a major financial decision.

Understanding Each Other's Money Story
How you grew up can influence the way you think about money today.

Was money plentiful or scarce in your household? Did your family rely heavily on credit and debt, or avoid buying anything they couldn't pay for with cash? Did a parent spend recklessly? Did your family experience the loss of a job or business?

Experiences like these can shape financial behaviors and attitudes well into adulthood. Two spouses can therefore look at the same financial decision and reach very different conclusions, even when they share the same overall goals.

Talking about those experiences can help couples understand not only what their spouse thinks about money, but why they think that way.

Don't Wait for a Major Decision
Differences in financial attitudes often surface at important transition points. College planning is one example.

One spouse may believe strongly in paying as much of a child's college expenses as possible, while the other may believe children should assume greater responsibility for funding their own education. Waiting until tuition bills are approaching to discover that difference can make an already significant financial decision more difficult.

Having the conversation earlier gives couples an opportunity to identify differences and develop a plan before an immediate decision has to be made.

Retirement Can Reveal Different Priorities
Retirement is another transition that can expose very different perspectives about money.

After spending decades accumulating assets, moving from saving to spending can be uncomfortable. One spouse may be ready to retire, travel, and spend more time with family, while the other may want to continue working or may be uncomfortable drawing down retirement savings.

The financial numbers are only part of the conversation. Retirement can also raise questions about identity, purpose, and what each spouse wants daily life to look like.

Financial planning can help couples consider both sides of that transition and determine what retirement might look like in a way that works for both of them.

An Inheritance Can Change the Conversation
Receiving an inheritance can introduce another set of questions.

A spouse who inherits assets may have strong feelings about how that money should be used or eventually passed on. They may want to preserve the assets for children, give some to their community, or establish other expectations for how the inheritance fits into the family's finances.

Those conversations can also connect to estate planning and decisions about how assets ultimately pass to future generations.

Both Spouses Should Understand the Financial Picture
In many relationships, one spouse takes primary responsibility for managing the household's finances. That arrangement can work, but it is still valuable for both spouses to have a basic understanding of their financial situation.

If the spouse who manages the finances dies, the surviving spouse could suddenly be responsible for making significant financial decisions while also dealing with a difficult personal loss.

Helping both partners understand their assets, financial plan, and long-term goals can make the household better prepared for the unexpected.

Find the Common Ground First
Couples don't necessarily need to have identical attitudes about money.

One spouse may initially appear overly conservative to the other, while the other may seem too aggressive. Exploring where those attitudes come from can reveal common ground that isn't immediately obvious.

From there, couples can move into the practical elements of financial planning, including retirement, Social Security, estate planning and long-term care.

The goal isn't simply to agree on every financial decision. It's to understand each other's priorities, develop a shared view of the future and create a financial plan that reflects it.

Talking about money before a major decision or life transition forces the conversation can give couples more time and flexibility to work through their differences and plan for what's important to them.

This article is based on the Paths Through Divorce podcast episode “Money Talks for Married Couples,” from EP Wealth Advisors.

EP Wealth Insights Podcast Disclosure

The speakers featured in this podcast are employees and/or Investment Adviser Representatives of EP Wealth Advisors. The information discussed is provided for educational and informational purposes only and should not be considered personalized investment, financial, tax, or legal advice.

The views expressed are those of the speakers as of the recording date and are subject to change. Investing involves risk, including the possible loss of principal, and past performance does not guarantee future results.

Before making financial decisions, consult your financial, tax, or legal professional. EP Wealth Advisors is a registered investment adviser. For additional information, including our Form ADV, please visit www.epwealth.com.