Making Financial Decisions Without Your Spouse is Asking for Trouble
Updated on Jan 23 2019
Making financial decisions together with your spouse is important for not only communication purposes, but also for financial well being to make sure you’re properly preparing for your future finances. Learn about three dangers of making financial decisions without your spouse.
The old adage “two brains are better than one” is never more true than when it comes to financial planning as a couple. Financial planners often see one spouse more in control of financial decisions that the other, but they warn that leaving all the financial decisions up to one spouse can be cause for concern and have a negative impact on long-term financial goals.
Learn more about the danger of leaving financial decisions to one spouse.
Three Dangers of Making Financial Decisions Without Your Spouse
When making long-term financial decisions it’s crucial that both partners be involved in planning. Failing to engage all parties can jeopardize retirement planning and negatively impact your financial goals - and may even negatively affect your relationship.
1. Leaving financial decisions without your spouse can cause issues in the case of a medical emergency, dementia or death.
When one spouse takes over the financial planning, it can lead to an imbalance in the relationship - and the finances. And, if the spouse who handles long-term finances becomes ill, diagnosed with dementia or dies before the other spouse it can be particularly problematic leaving the non-financial savvy spouse to make hard financial decisions while also going through the grieving process. It’s important to remember that everyone’s investment time horizon and life expectancy are different and it’s important to prepare for life - and emergencies - together.
2. Making financial decisions solo may point to deeper relationship issues.
If relationships are built on trust, that trust should extend to financial and wealth management planning. Today, one in four marriages end in divorce and over fifty percent of those divorces cite financial disputes as the primary reason, according to Associate Professor of Pyschology, Renée Peltz Dennison Ph.D. While many couples split household chores and other life responsibilities, financial planning should be one duty where both parties are fully invested. Not allowing a spouse to be involved in planning may point to deeper tension in the relationship.
3. Not having all parties involved in financial planning can lead to misunderstandings.
It is very common for one spouse to dominate conversations about financial planning. However, a silent partner can mean that he or she is not understanding the conversation, or not agreeing with the outcome. Either way, it is vital that both parties be active participants in financial planning, totally understanding the potential outcomes of investing decisions. Ensuring everyone is on the same page can eliminate misunderstandings and possibly blaming later. Being in-sync with your finances will also help you be more successful with your financial planning as a team.
It’s Important to Plan for Your Financial Future Together With Your Spouse
Overall, leaving financial decisions to one spouse can be dangerous to your financial health - and even the health of your relationship. Having a spouse, even one who is not financially savvy, be an active partner in financial planning provides oversight and accountability from another individual that is personally invested in your financial future.
A trusted financial advisor can help facilitate financial discussions between couples and work to include both parties in crucial financial planning conversations. Connecting with an expert fiduciary financial advisor and walking through a financial goals and assessment together is a great way to ensure both parties are heard and are making financial decisions cohesively.
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