Investing as couples

You’ve probably learned over the years how
challenging it is just for you to navigate the
investment maze and make sound investing
decisions. When you have to consider someone else, dealing with these issues becomes
doubly hard given the typically different money
personalities and emotions that come into play.
In most couples with whom I’ve worked as a
financial counselor, usually one person takes primary responsibility for managing the household
finances, including investments. As with most
marital issues, the couples that do the best job
with their investments are those who communicate well, plan ahead, and compromise.
Here are a couple of examples to illustrate my
point. Martha and Alex scheduled meetings
with each other every three to six months to discuss financial issues. With investments, Martha
came prepared with a list of ideas, and Alex
would listen and explain what he liked or disliked about each option. Alex would lean toward
more aggressive, growth-oriented investments,
whereas Martha preferred conservative, less
volatile investments. Inevitably, they would
compromise and develop a diversified portfolio that was moderately aggressive. Martha
and Alex worked as a team, discussed options,
compromised, and made decisions they were
both comfortable with. Ideas that made one of
them very uncomfortable were nixed.
Henry and Melissa didn’t do so well. The only
times they managed to discuss investments

were in heated arguments. Melissa often criticized what Henry was doing with their money.
Henry got defensive and counter-criticized
Melissa for other issues. Much of their money
lay dormant in a low-interest bank account, and
they did little long-term planning and decision
making. Melissa and Henry saw each other
as adversaries, argued and criticized rather
than discussed, and were plagued with inaction because they couldn’t agree and compromise. They needed a motivation to change their
behavior toward each other and some counseling (or a few advice guides for couples) to make
progress with investing their money.
Aren’t your long-term financial health and marital harmony important? Don’t allow your problems to fester! Remember what the famous
psychologist Dr. Phil McGraw says about problems and making changes: “You can’t change
what you don’t acknowledge.” I couldn’t agree
more with this assessment when it comes to
money problems, including investing issues.
In my work as a financial counselor, one of the
most valuable and difficult things I did for couples stuck in unproductive patterns of behavior
was to help them get the issue out on the table.
For these couples, the biggest step was making
an appointment to discuss their financial management. Once they did, I could get them to
explain their different points of view and then
offer compromises.

If you don’t know how to evaluate and reduce your spending or haven’t
thought about your retirement goals, looked into what you can expect from
Social Security, or calculated how much you should save for retirement,
now’s the time to do so. Pick up the latest edition of my book Personal
Finance For Dummies (John Wiley & Sons, Inc.) to find out all the necessary
details for retirement planning and much more.