Sharon Epperson - The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money--and Live Richly Ever After

THEBIGPAYOFF

8 Steps Couples Can Take to
Make the Most of Their Money
and Live Richly Ever After

Sharon Epperson

For Dylan and Emma

CONTENTS

The Path to the PayoffStart Now. Start
Talking . It s Never Too Late .

T he first time we met with our financial adviser, my husband, Chris, did something I never would have expected.

But more on that in a minute.

My husband and I didnt sit down and prioritize our financial goals as a couple until several years after our wedding. We spent the first few years of our marriage, well, spending. We took trips to Ireland, Brazil and Japan; we saw plays, movies, concerts; we ate at some of the best restaurants in New York. But when we decided it was time to move out of our Manhattan apartment, find a house and have kids, we also agreed it was time to get serious about our finances.

I thought getting a financial adviser would be the first thing to do. I was very excited about the meeting. My husband was not. I thought we had a pretty good handle on our finances, and I wanted verification that we were on the right track. My husband viewed our first financial planning session as cheerfully as you might regard dental surgery (without novocaine).

During our meeting, Chris kept his remarks brief, while I tended to give long, detailed responses to the advisers questions about our spending and saving habits. Chriss remarks were as abbreviated as a movie trailer; mine were like the directors cut DVD of Titanic. But it was all goodI thought the session was going well. Our adviser was very helpful in explaining everything we would need to develop a comprehensive financial plan. It was essential information. We talked about saving for retirement and our childrens college expenses, establishing an emergency fund, and finding the right insurance policies.

It was during a detailed description of the difference between whole and term life insurance coverage that my husband did something supremely surprising.

He fell asleep.

I was extremely embarrassed that Chris did not seem to be interested in the money matters of our relationship. I had spent hours crunching numbers on retirement. I had spent long nights using mortgage calculators on the Internet. I had used weekends to compare insurance policies. What did it say about our marriage that I was more interested in our financial matters than he was? What impact would it have on our portfolio? On our relationship? On our future?

Finance is the enemy of romance. If youre thinking about money 24-7, chances are youre not thinking enough about your husband or your children. If youre constantly worrying about retirement or college savings, you may not be paying all the attention you should to soccer practice, or parent-teacher conferences, or date night dinners and movies or all the things that make life worth saving for.

Good financial planning isnt just about numbers on a computer screen. Good financial planning helps you get control of your money matters so you can stop fretting about cash and start focusing on your life. The same qualities that go into creating a lasting relationshipunderstanding, compromise, and patienceare also important when it comes to building a secure financial future.

Its tough enough to get a handle on money matters when youre single. Things get even more challenging when youre part of a couple. Smart financial decisions require a cool hand. But decisions made by a couple require a warm heart as well. How do you find a balance between the hand and the heart, between love and money?

Getting sound financial advice is the first step. People tell things to their financial advisers that they wont tell to their friends or family members. Have you ever told a friend how much money you make in salary? Probably notbut you might have confided to a close friend about how your hubby is doing in bed. Do you keep your mother up to date on your annual bonuses? Most likely nobut you might have filled mom in on your kids potty training progress. Have you ever told a boyfriend or girlfriend your net worth? Of course notbut you may have spilled your guts about how a previous boyfriend or girlfriend made you feel worthless. Money is the last American taboo. People will talk about religion in public restrooms, theyll gab about sex in taxicabs, and theyll go into loud, echoing detail about ointment-requiring medical conditions on subway platforms. Nobody likes breathing a word about how much they make. We routinely act like we make much more, or much less, than we really do.

But the bigger, more important, secret is this: how to let go of our investment inhibitions. In divulging their finances, couples are forced to come to terms with their own fears and anxieties about managing debt while living comfortably, saving for retirement, and putting money away for their childrens education. Its important to learn what most people have never been taughthow to talk about money with ones significant other in a way thats productive and profitable.

Having the background to make smart financial decisions and select suitable financial advisers has become even more important in the post-Enron-Tyco-WorldCom world. In an age when corporate chieftains routinely take perp walks, and when the starchiest of Wall Street firms and Main Street mutual fund companies have faced questions about honesty, you shouldnt leave your financial future in the hands of others without knowing exactly what youre doing.

Look in the mirror. Then look through this book. You are your first and best financial adviser. Its important to do your homework, even before you make the choice about whether or not to get professional financial advice. Average investors have become increasingly disenchanted with investment firms that profited on conflicts of interest between brokers and research analysts. Mutual fund holders and employees who contribute to 401(k) plans at work pulled millions of their hard-earned dollars from fund companies a few years ago following the revelation that fund managers at some firms engaged in shady trading practices. Now that new pension-reform legislation has made it easier for employers to offer 401(k) participants advice about their investments, its even more important to do your own homework. Investigations into the insurance industry have forced consumers to pay closer attention to how agents and brokers are compensated. Your confidence in the so-called pros of the financial community is probably shaken. Whom do you trust? How can you trust anyone?

Finding trustworthy counsel is difficult. You almost dont want to trust people that seem too interested in the matter. Many couples are shy about seeking the help of a financial adviser and may feel uncomfortable sharing details with the adviser they end up choosing. When it comes to family finances, one thing is usually true: very soon, its too late. Unfortunately for many couples, without a third party facilitating the conversation, serious discussions about finances may be put off for far too long. I know a couple with two teenage sons who still have not begun to save for college. Mounting money concerns played a role in this couples eventual divorce. Stifling feelings and frustrations about money can take a toll on marriage. Money cant buy you love, but many love affairs have ended over money problems.