Marriage and Money
While most people think of flowers and romance when they think of marriage, it is critical to get a handle on your finances before taking your vows. Couples who live well below their means enjoy peace of mind and the financial resources to realize their shared dreams.
In an article in Money Magazine, Katherine Reynolds Lewis writes that the signs of financial marital trouble include arguing frequently and trouble with debt, savings or spending.
In an analysis of 4,500 couples, Jeffrey Dew of Utah State University found that those who disagreed about money once a week were twice as likely to divorce as those who differed less than once a month. Dew also found that a couple with $10,000 in debt and no savings is twice as likely to divorce as a couple with no debt and $10,000 in savings.
Couples should work on a budget together in order to safeguard their finances and preserve financial harmony in their marriage. We also recommend that couples renew their shared financial vision after 25 years of marriage, as they enter its second half. All of this focus on financial planning for marital happiness begins with spiritual values and is a way to add significance to our lives.
The second half of marriage can either be the best time of life or the time when a marriage breaks up. The transition can catch unsuspecting couples off guard.
A survey from the book, The Second Half of Marriage, asked couples to respond to the question: What are the areas that cause the greatest stress in your marriage? In every decade of life, the No. 1 answer was finances. Budgeting, retirement planning and other money issues can easily ruin what might otherwise be a time for remembering why you got married in the first place.
Times of transition are particularly hard on marriages. As the work of raising a family wanes, couples often look to each other for help in redefining their calling in life. Parents who have devoted years to caring for children may want to fulfill a dream they postponed decades ago, like going back to school, taking on a new career or becoming more involved in charitable causes. Working parents, on the other hand, may find they are ready to scale back their careers.
If you and your spouse are approaching this transition, take time to check up on your retirement money, your marriage and your mission.
First, get your retirement plan together. A retirement plan, like a spending plan, helps a couple limit their disagreements to only those issues outside the plan.
Here, a little advance planning can make a big difference. If you have to choose between funding your retirement and paying for your children's education, choose retirement planning. There are ways to drastically reduce the college costs but not retirement costs. Your children can borrow for their college education. If they do, they still have a long time to build wealth and repay their loans.
For most couples, expenses drop significantly after their children finish college and move out on their own. This gives couples one last chance to save for retirement. During this time, it is important not to invest either too aggressively or too conservatively. Between age 45 and 65, the size of your portfolio should at least double and then double again.
Next, communicate with your spouse. The period just before the children leave home is often the most difficult on the marriage. For the first few decades, most couples focus almost exclusively on their children. Creating new channels of communication that are spouse-centered are critical during this time of transition.
The natural course of relationships is to drift apart, so don't be down on yourself if your marriage needs a little work. The fact is, if you aren't working on your marriage, it is probably headed in the wrong direction.
Finally, find your mission for this new phase of your life. It is easy when you are young to think you have all the time in the world for all the good things in life. But then your job and your family began to occupy most of your time. As these responsibilities ease, revisit the bigger life questions that are important to you.
In his book, The Seven Stages of Money Maturity, George Kinder uses three questions to help people understand these life issues. Take the time to write out your answers honestly and thoughtfully, and then share your thoughts with your spouse.
· If you knew you had all the money that you needed, now and in the future, how would you live your life?
· If the doctor told you that you would die suddenly and without symptoms in five to 10 years, how would you change your life?
· If the doctor told you that you would be dead within 24 hours, what feelings, regrets, longings and unfulfilled dreams would haunt you?
Nothing is more meaningful than structuring your life around lasting values. Reevaluating our purpose can give renewed meaning to our lives and relationships, especially in this season of change.
David John Marotta, CFP, AIF, is president of Marotta Wealth Management Inc. of Charlottesville, Va.
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