Did you enjoy your Valentine’s Day? Did you splash out on an expensive dinner and night at the theater or did you make a nice dinner at home and stream a movie?
What you and your partner each prefer to do on a date gives some insight as to how each of you thinks about your personal finances. Are you both on the same page?
According to a survey by the American Institute of Certified Public Accountants, 88% of Millennial couples say financial decisions are a source of tension in their partnerships. Half say that money matters come between them on a weekly or daily basis.
One reason that money may cause friction for young couples is that not enough of them discuss the role it plays in their relationship. The survey found that only a little over half (56%) of Millennial couples had talked about their individual saving and spending habits. Just over half (51%) had drawn up a monthly budget for their household. Even fewer young couples had talked about their long-term financial goals together (42%), planned a retirement strategy (35%), or made paying off high-interest debt a priority (33%).
Whether you’re considering marriage, are a newlywed, or are in a long-term committed relationship, it can be challenging to talk about finances because these conversations need to go way beyond simply discussing spending habits. Sharing financial goals and then planning for them is critical to achieving financial peace of mind as you move through life’s milestones.
Here are some guidelines to get things rolling:
1.Start the conversation
Talk about the big picture so you can assess whether you both want the same things and how you might be able to adjust if you don’t. Define your dreams and discuss priorities.
2. Ask questions
Each of you should list questions or concerns, then discuss them together. For example, one of you might be a saver and the other a spender; one might be more concerned about debt than the other. Even if both of you are savers, your priorities might be radically different. This process also can unearth areas of concern that neither of you knew about and will be helpful as you design or adjust your financial plan.
3. Determine your respective risk tolerances
Financial advisors can help you assess your tolerance for risk. Studies show that women tend to have a lower risk tolerance then men, but it’s important for each of you to be honest about how risk makes you feel. You might want to meet individually with your advisor so you can conduct separate risk assessments. That way, your advisor can get a true understanding for how each of you feels without influence from the other.
4. Identify goals and priorities
How long do each of you plan to work? What type of retirement lifestyle appeals to you? Do you want to keep your primary home or downsize? Will you stay put or move to a new city? Will you fund your children’s education? Do you want to donate to charities? Establishing mutual goals will make your planning smoother, especially if the economy experiences a downturn and you need to adjust.
Our team of advisors can help you address life’s financial hurdles. Contact us today so you can take “money issues” off of the list of topics that stress your partnership.
The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.This information does not purport to be a complete description of the developments referred to in this material. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.
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