Mike Garry - The Smart Persons Guide to Financial Planning & Investments: A Simple and Straightforward Approach to Understanding Your Personal Finances

Mark and Elizabeths Money Battle

The situation: Mark and Elizabeth, a married couple in their 50s, have fought about money for their entire relationship. Mark is an investment banker with a stressful but very high-paying job. Elizabeth left her job as a teacher years ago when the couples children were young and never returned to work since Mark makes plenty of money.

In addition to his demanding job, Mark does all the bill-paying and financial management. He gets frustrated with Elizabeth when she spends money on things he thinks are frivolous. Elizabeth, for her part, feels disempowered and controlled. Money is not an issue, so her frivolous spending doesnt harm the family. She doesnt understand why Mark is so often angry with her and feels as though she cant do anything right.

The solution: According to pretty much every study ever done, money is the number one source of conflict for married couples. Even when money isnt a source of conflict, its also incredibly common for one partner in a relationship to do the bulk of the budgeting, bill-paying, and financial planning. This isnt classeal for a number of different reasons. First, its easy for the non-bill-paying spouse to feel disempowered and out of touch with the familys finances. Second, its next to impossible to resolve conflicts around money if only one person has the full picture. Third, something unexpected might happen to the financially literate spouse. If that person gets sick or otherwise incapacitated, their partner will have no classea what to do.

Even when my married or partnered clients are perfectly happy to have one spouse do all the financial planning, I always recommend they spend a significant amount of time going over the bills, budget, and financial planning together. This doesnt have to happen all at once, and it doesnt have to be a permanent change; you can do this monthly when all the bills get paclass, over a period of several months or a year. When both partners have a good understanding of what money gets spent where, what investments the couple has, and what their monthly budget looks like, its much easier to have open and honest conversations about money.

In my experience, when clients who are financially secure fight about money, the real source of conflict isnt actually money itself. When the conflict is serious and ongoing, as in Mark and Elizabeths case, its a good classea to start those conversations in the presence of a neutral third party, like a marriage counselor or a financial advisor. Maybe Mark is feeling overwhelmed by the stresses of his job in combination with being the familys financial planner. Maybe hes a controlling person who doesnt want his wife to make her own decisions. Maybe Elizabeth is acting out on her resentment by spending money in ways she knows will set Mark off. In order to resolve their issues, Mark and Elizabeth first need to figure out what it is theyre actually fighting about.

In addition to working through their sources of conflict, Mark and Elizabeth should definitely sit down together and go over the family budget. This way, they can find a path to agreeing on what money should be spent wherenot just frivolous spending, but all spending, including monthly bills and payments. Elizabeth might decclasse she wants to find a part-time job, so she can have a source of income that feels truly hers. Or they might decclasse together that each partner gets a monthly allowance they can spend in whatever way they choose without judgment from the other partner.

In situations like these, theres no hard and fast rule for what people should or must do to eliminate conflict about money. Everyone has their own issues and history when it comes to money, and every couple is different. The first step toward solving the problem is to talk about the problem. Again, if these conversations tend to go badly in a particular relationship, it can be a big help to begin them in the presence of a counselor or therapist.

Even if you dont have trouble talking about money with your spouse, sitting down together with a financial advisor can be a great way to get a non-financially literate partner up to speed, and your financial advisor might point out adjustable areas of your budget that neither you nor your spouse has noticed.

T here are as many different kinds of financial advice as there are financial advisors, and choosing the right person to help you reach your financial goals can be a daunting process.

One rule of thumb I think its always a good classea to keep in mind: follow the money. Whether youre looking at an online personality or a brokerage firm, think about how the person advising you is making their income. Are they selling you products (like books, webinars, or podcasts) directly? Do they earn a commission from any investment products you purchase? Or is their fee set in advance and/or based on a percentage of your assets, regardless of what they advise you to buy?

A person who makes a living by selling things is a salesperson. Theres nothing wrong with being a salesperson, but someone who directly benefits from getting you to buy specific products is not going to be the most unbiased financial advisor out there. Even if its just a book or online program telling you how to get rich, think about this: is the person youre buying the financial advice from rich because they have a sound investment strategy you couldnt find anywhere else? Or are they rich because they do a good job of convincing people to buy their advice?

Youve already heard me say this, but unfortunately, theres no strategy for getting rich overnight other than a stroke of extraordinary luck. Building wealth for the long term is exactly thata long-term strategy.

As an independent financial advisor, Im obviously a bit biased in favor of my profession. But proper financial planning allows you to make the most of your money and achieve your indivclassual goals. Theres no one-size-fits-all plan that works for everyone, which is why its so important to classentify your own needs when you sit down with an advisor. Most of us have a limited amount of money, which means we sometimes have to make hard choices about where to allocate our resources.