Savers and spenders. Conservative investors and risk takers. People have different attitudes about money and investing. If you and your partner are polar opposites when it comes to your finances, you may be in for a bumpy ride when you try to come up with a financial strategy that you can both agree on.
Finances can be a major source of disagreement between couples. Although many couples avoid talking about their money differences, opening the lines of communication early in your relationship can prevent friction and misunderstandings down the road.
Air Your Financial “Baggage”
Usually, attitudes toward money begin in childhood and are deeply ingrained. Your family’s relationship with money can influence your own feelings about saving and spending. If your partner’s family doesn’t have similar values, the two of you may have a difficult time reconciling your differences.
Plan a time to discuss your goals and your feelings about money with your partner. Talking about how your families handled money may provide some insight into your approach to your own finances. And, despite your differences, you may find you have more values in common than you originally thought.
The Operative Word Is “Compromise”
The purpose of talking about your attitudes toward money isn’t to convince one partner to adopt the other partner’s outlook. Discuss financial values with each other with the goal of reaching a mutual agreement about your spending plan. If one of you wants to save every extra dollar and the other wants to spend it, you’re going to have to compromise. Choose a realistic amount to invest toward your goals. Then, set aside some money to spend on yourselves. The “spender” is more likely to stick with a savings plan that doesn’t leave him or her feeling deprived.
Share the Responsibility
Both partners should understand all the details of your finances — and that includes each other’s assets and debts. Outlining your goals and creating a strategy to reach them should be one of your first priorities.
Then, determine how you’re going to handle your money. You may want to consider having separate checking accounts, as well as a joint account for paying bills.
You’ll also want to decide whether one partner will be responsible for paying bills or whether you’ll pay them together. Having fiscal responsibility may help the spender get a handle on his or her frivolous spending habits. And the saver may learn that there is enough money left at the end of the month to spend on something fun.
Risk Is a Personal Issue
When it comes to investing, it’s hard to change how someone feels about risk. If one of you is an aggressive investor with a high risk tolerance, while the other wants to preserve principal at all costs, choosing a mix of investments that’s acceptable to both of you may be a challenge. If you and your partner share an investment portfolio, ask your Security National Bank Wealth Management financial professional to review your situation and make suggestions. Getting an objective assessment may help.
If you can’t reach a compromise, you may want to consider having separate investment portfolios. The conservative partner can stick with fixed-income and cash investments, while the partner who’s comfortable with risk can concentrate on equity investments.
Communicating honestly with your partner about money is the key to creating a better financial match.
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