Planning as a Couple – Are You The Financial Director In Your Family?

23/11/2024

In my job as a financial planner, I come across families of all shapes and sizes but one constant is that usually one person is in charge of the finances, whether by design or default. In fact a poll by MoneySavingExpert shows that in 67% of married couples just one partner takes control of the finances, 26% share responsibility and 7% keep their finances mostly separate.

Usually, I find that when i am going through the financial planning process there is one partner that takes the lead. They will take charge of telling me the families hopes and dreams and what it is that they want to get out of the process whilst the more passive partner will be nodding in agreement (with the occasional gaze out the window!)

While it is perfectly natural for one partner to be more money focused, it can cause issues down the line if both partners are not engaged in the process of creating their financial plan.

Hopes and dreams

Over the years I have been able to master the art of engaging the less financially minded partner. Even if the more talkative partner is convinced they want the same things I need to get to know the hopes and dreams of them both.

We often find that what they want is the same. They may both want to retire around the same time and travel the world but often what the future looks like is different to each individual, and this is completely normal.

The last thing we want to do is create a financial plan for a family based on the needs and wants of one person within that family and although financial plans are flexible its helpful to discuss all aspects of the plan and what it means to each person.

Financial Apathy

Financial apathy is a lack of motivation of desire to manage your finances.

I have had clients over the years whose partners wont discuss anything related to finances. “That’s her job” or “That’s his job” or “I don’t get involved with the household finances” are common things i hear from these clients.

While this may work on a day to day basis it puts the partner who doesn’t engage at risk.

The MoneySavingExpert poll mentioned above talks about the Three Ds. What would happen to the financially apathetic partner should there be a Divorce, Death or Dementia?

Without any knowledge of the household finances how would the apathetic partner deal with this?

I had a client come to me recently following a divorce and she did not ever engage with the household finances and didn’t even know where to start with paying bills or setting accounts up. As you can imagine this was a stressful situation for her, at an already difficult time.

Let’s imagine Partner A deals with the finances and suddenly passes away, what would Partner B do? I’ll phrase that slightly differently, do you know what you would do if your partner passed away? Where are the bank statements? the pension statements? Is there any life insurance?

As you can imagine the amount of distress would be overwhelming.

How do we help?

We can help take the apathy out of the situation by engaging with both parties equally to discover what is truly important to us. It doesnt matter to us which partner sends us copies of their statements but it matters greatly that both partners know where they are and what they mean.

We have a secure client portal that both clients have access to that store all the important financial information that we look after such as life insurance policy documents, pension statements, copies of wills etc etc.

Once we have a financial plan in place you will be surprised as to how much calmer and more relaxed you will feel about money.

It is critical that both partners understand the role money plays in your families future and understand what it is that you are aiming for.

If you want to talk to a trusted professional adviser about how to plan for the future please get in touch.

Matt