Financial Planning For Couples | 5 Things To Consider
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Partners in Finance

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Updated February 18, 2022

Christine Schmidt, CFP® Managing Director, Family Office

Working with your spouse on financial planning offers security.

In her over two decades working in the financial industry, Trust Point’s Christine Schmidt has seen a gradual shift in women’s roles in financial management.

Women have long been key decision makers behind the scenes, but that role is becoming more front and center, with women showing greater interest in investing and financial matters. That change is increasingly important as more women find themselves with significant assets—and the primary managers of their personal wealth. They outlive men by six to eight years on average, according to the World Health Organization.

On the whole, there is a significant amount of wealth that is set to transfer in the next few decades—$30 trillion based on a 2019 report from Investopedia. Women are likely to receive the majority of that wealth after the passing of aging parents and spouses.

Schmidt, CFP® and Vice President of Trust Point’s Family Office in Minneapolis helps ultra-high-net-worth clients manage finances across multiple generations. In doing so, she says it is vital for both men and women stakeholders to have seats at the table.

“It’s important that both are taking an active role in the family finances,” Schmidt says. “Especially when it comes to family wealth. It’s important for women to find their voice and ask questions of their advisor so they become comfortable with their financial plan and in the management of their wealth.”

Still, gender roles can play a significant part in how men and women think about money and investments, sometimes making it challenging to find common ground. From the things they save for, spend money on, to the way they invest, the approach can vary widely. Being aware of these differences can help couples better understand one another’s strengths and weaknesses, and help find ways to handle finances together.

There are several key differences between how men and women invest according to High Net Worth Men vs. Women, a new white paper published by Spectrem Group. Here is a look at some of those.

Managing Risk

Women may face unique challenges and tend to think more conservatively when managing their finances. They may spend time out of the workforce to care for family members, for example, and won’t save and invest for themselves. They might also make sacrifices to save for children’s college costs rather than putting money toward their own retirement.

Women’s decision-making tends to be built on family and relationships. Generally, women tend to be less willing to take on investment risk than men, leading to lower average rates of return on their investments over the long-term. If this is the case, women may need to save even more for retirement.

Men tend to focus more on their portfolio’s performance—the rate of return. Women, on the other hand, tend to prefer safe investments. About 41 percent of men say they’re willing to take on more risk in order to get a better return on their investments, according to a recent BlackRock survey. Only 22 percent of women say the same.

A 2017 report from Mylo Financial Technologies found that women were half as likely to be engaged in a high risk, high potential return strategy and twice as likely to say they wanted no loss at all.

financial planning for couples men vs women

Going At It Alone

When it comes to handling their own investments, just 31 percent of women say they prefer a hands-on approach, compared with 39 percent of men, according to the Spectrem white paper.

Satisfaction likely is a big factor, as nearly half of all men said they enjoy investing compared to less than a third of women.

Lack of confidence is another factor. The Mylo Financial Technologies report found that 8 percent of women said they were “very knowledgeable” or an “expert” on investing compared with 25 percent of men. The disparity is more common among single women.

Finding Common Ground

For all of their differences, men and women can still find investment harmony. Trust Point’s Schmidt offers these tips for coming together.

Start the Conversation

Men and women need to begin a financial dialogue with each other and both be present and engaged in advisor meetings.

“To be a trusted advisor for a family we encourage both spouses to attend meetings and ask questions of each partner to get the conversation start-ed,” Schmidt says. “We ask each party to share their knowledge and roles with regard to finance and money management in the household.

Sometimes we have to remind the women that we as their advisors need to hear their voice and the importance of these conversations about their wealth and money. We start that dialogue around their personal values and financial goals, and remind families that it’s not just about tomorrow, but generations down the road, too.”

You can learn a lot about a couple through their body language and simple looks during a meeting as the conversation begins. Typically during a meeting, a look or change in posture can signal that they have heard something of interest that will continue the conversation even after a meeting. Whether or not a solution is created during the meeting, that’s OK. The conversation will continue at home.

Identify Your Money Goals

Goals are important in any relationship—marriage or otherwise. When it comes to sharing financial responsibilities, having each spouse identify their goals for their financial future is the first step to getting on the same page.

Generally speaking, each person brings different goals and different views and tolerances to a relationship when it comes to saving, spending and budgeting. Being able to find a compromise among these differences is important.

“Once a couple can get on the same page about a financial plan, decisions become easier,” says Schmidt.

“When you’re talking about families of wealth and succession in particular, a lot of it comes together when you talk about what you want to pass on to your children and your children’s children,” she says. “That context changes the conversation and allows a dialogue where you can bring a man and woman together on the same page. It adds a different dynamic when you think generationally.”

Identify Your Money Values

Beyond goals, a couple needs to talk about their individual view of money. That early conversation in Trust Point’s offices can be very telling about a person’s background and how they grew up appreciating the value of a dollar.

“It’s not just what your goal is for your wealth, but what you each value as a couple, and as individuals,” Schmidt says. “What is the first big purchase you saved for? How do you value or prioritize different areas of financial spending? Is charitable giving a priority for you? It’s easy to talk about money and cash flow maintenance, but when you bring in your money values, it’s a new conversation that may have never been discussed and each party needs to participate. Both the husband and wife need to share those values equally to move forward.”

If you’re looking for guidance for you and your spouse regarding a financial plan, financial professionals at Trust Point have the expertise to help. Contact us to have a conversation and find common ground on a financial plan with your spouse.

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Christine Schmidt, CFP® Managing Director, Family Office