Avoiding disagreements when talking about finances
For some couples, talking about finances becomes taboo due to differences in money management styles and financial goals for the future. It turns out that financial disagreements between couples may reflect a fundamental difference in the way men and women approach money matters.
Data reveals the role gender may play during financial planning
Research commissioned by Ameriprise Financial reveals that men and women are planning for one of their biggest financial milestones — retirement — in very different ways. More than half of men surveyed report setting money aside in their own investments, but not nearly as many women say they’ve done the same (54 percent vs. 46 percent). Men are also more likely to have determined the amount of income they will need in retirement (31 percent vs. 20 percent). (The New Retirement Mindscape 2011 City Pulse index was created by Ameriprise Financial utilizing survey responses from 11,611 U.S. adults ages 40-75. The survey was commissioned by Ameriprise Financial, Inc. and conducted online by Harris Interactive from Aug. 4-12, 2011. The national average sample and the 30 U.S. metropolitan areas were each weighted independently to best represent each area. Propensity score weighting was also used to adjust for respondents’ likelihood to be online.)
While women may not be focusing as much on financial goals, they are more likely to report that they’ve thought about what they’d like to do when they retire. Women are significantly more likely than men to say they plan to spend more time with family (41 percent vs. 34 percent), and that proximity to family is a very important factor in determining where they will retire (40 percent vs. 27 percent). They are also more likely to rate access to healthcare options and facilities as a very important factor (38 percent vs. 32 percent).
These differences in how men and women approach key financial decisions may be present for many other milestones as well, such as starting a family or buying a home. So how can you bridge the gap to approach your goals in a way that makes both you and your partner comfortable? The following tips may help guide you through these conversations.
Don’t avoid financial discussions
Be available to your partner and communicate often — setting expectations ahead of time can minimize future disagreements. Keep in mind that it’s crucial to discuss financial matters to ensure your plans for the future are in sync — but be prepared to compromise. Also remember that financial planning isn’t just math — it can be an emotional process as well. Balance rational thinking from a financial standpoint with finding the right way to communicate your ideas and expectations as a part of family discussions.
Understand your differences
The key here is to understand each other’s financial personality and approach to money, so you can tackle your financial needs and goals with mutual respect. It’s helpful to recognize your own financial strengths and weaknesses and those of your spouse or partner so you can have a rational conversation and find a common ground. By approaching your finances with an idea about how the other may view it, you will likely have a more productive conversation.
Keep both partners involved
Your financial goals and priorities will likely evolve as you move through life, but make sure both partners are involved along with way. While it’s not a pleasant thought, there is a possibility that you or your spouse may be managing your finances alone at some point. It’s important that both partners remain equally involved in financial decision-making so in the event that one spouse is left to make these decisions alone, they can remain financially secure.
This may also minimize conflict amongst other family members in the wake of a tragedy or sudden death.
Put it all in perspective
While finances can create plenty of stress in relationships, it’s important to keep the big picture in mind. While you plan as a couple, consider important factors like your career goals, how you might support your children, and when and how you might retire.
Though talking about finances may never come naturally, plan some time with your spouse or partner this year to have an open financial dialogue and to share your vision of your future together.
Ronald Garver, CFP®, CRPC®, is a certified financial planner practitioner and chartered retirement planning counselor.