Investing can be a tricky endeavor, but how about investing for two? Successful investing requires you to have a firm grasp on both your tolerance for risk as well as your appetite for volatility. So, what if you and your spouse have different views on money?
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Not one to pass myself off as Dr. Phil, but this is a topic to get your arms around and the sooner the better. Plenty of money or scarcity of money can bring about issues. A lack of agreement about money matters creates a lot of stress and is a leading source for marital disputes.
Ironically, while a lack of money is stressful enough, having a lot of wealth can be just as bad if you can't agree on what to do with it. Therefore, having a sound strategy for handling money as a couple is an important skill to develop. Here are some suggestions that may help put the two of you on the same page.
Have the talk
An open honest conversation goes a long way when discovering your partner's attitudes towards money. One of you may be the wild spender and the other may be the conservative penny pincher. Yes, both personalities can co-exist, but to do so successfully requires both of you understand how the other feels about money.
Don't try to impose your strategy on someone else's personality. It makes for a bad investor and a worse marriage. Yes, it is possible for two people to have a common goal but different strategies for attaining the goal. For example, both people may want to save for retirement, but one person is not comfortable owning stocks and the other person wants to invest exclusively in stocks.
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Nobody wants to feel like they are controlled by the person who writes the checks. Regardless of whether both of you work or not, each of you should have your own pool of money you can spend whenever you feel like it. This allows both of you to feel independent and not have to feel like a teenager asking your parent for money when you want to buy something. Big purchases may be best decided upon as a couple, but the small stuff is not worth sweating over. Agree on a minimum amount that requires both of you to approve before making a purchase.
If you are a couple, then working together is the cornerstone of a successful relationship. If your dream as a couple is to retire young then make sure both of you are working toward that goal. This can enhance a relationship if you make it fun and not like a business projection. While one of you may be a saver and the other an investor, there is a common goal. However, if one of you is saving religiously and the other is spending frivolously, it will bring about resentment and a very low probability you will reach your goal.
Unfortunately, many times one person takes control of the finances either out of knowledge, out of convenience or for some other reason. This is not such a bad thing if it works for both of you. However, things do happen where relationships sour, or worse, one of you dies. If you have no experience handling money or don't know where all your money is and you are suddenly thrust into the captain's chair, it can be a frightening and overwhelming experience. Make sure you know where the bank and credit card accounts are held and have a reasonably good working knowledge of basic financial skills.
Some people have zero interest in handling the money, I know, I get it. However, if that person is you, and you're suddenly required to take over the reins due to some life-changing event, you are much more likely to act rashly out of panic and fear. If financial decisions are born out of fear, they are not likely to have been thought through and are often flawed. Have a plan if you are suddenly required to be the captain of the ship.
The original article can be found at MoneyBlueBook.com:
5 money tips for couples