Whether you’re newly wed or
about to celebrate your silver anniversary, there’s a good chance you’re
making serious mistakes managing your money as a couple.
After talking with countless men
and women about money and how it impacts their relationships, David
Bach, vice chairman of Edelman Financial Services, has identified the
many mistakes that recurred, time and again. They’re all profiled in his
new book “Smart Couples Finish Rich: 9 Steps to Creating a Rich Future
for You and Your Partner.” Three of them follow here:
No protection plan
Bach said that too few couple
have a will. “50% of couples don’t have a will,” he said. “Some having
living trusts but many don’t put their assets in their living trusts so
it’s not valuable.” Although nobody enjoys the thought of outliving
their husband or wife, its an inevitability for one of you. And sifting
through confusion about assets is the last thing you’ll want to deal
with while grieving for your loved one. Do it while you’re healthy.
Disagreement on life after retirement
“You have to agree on, and
understand how you’ll live after you retire,” said Bach. All too often
it goes unspoken. For example, it’s entirely possible your spouse
intends to sell the house and live in another part of the country that’s
less expensive. Also, “couples have to run the numbers and understand
how much money they need to retire and the age they plan to retire.” In
some cases, people plan to start a small business in retirement, which
can have a dramatic impact on their spouse. All of the details need to
be on the table.
Recognizing appetite for risk
“Opposites attract,” said Bach.
And because opposites attract, couples need to discuss how they intend
to put money to work. There’s a good chance one of you has a greater
appetite for risk than the other. “But you have to invest as one,” said
Bach. Discuss whether the risk is worth the reward now, rather than
fight about it later.
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