Becoming a couple sometimes comes with a lot of compromises, especially when handling finances. Money is often one of the reasons married couples fight. No matter how much you love your partner, trying to merge your lives financially can be bumpy. Not to mention that you both may view money differently.
But learning how to manage your finances together does not have to be overwhelming. Two heads are better than one — when you work together as a team, you can dramatically improve your finances. Read on to learn more about why you should support your partner toward investing.
In this Guide:
Why You Should Support and Encourage Your Spouse Toward Investing
Investing is a great way to accumulate wealth. But talking about money with your significant other does not always come easily. However, bringing up the subject and discussing it can improve your financial goals. Here are some of the things you can achieve when you support your spouse on the road to investing.
1. Healthier Relationship
A couple that supports and encourages each other when it comes to money is likely to have a healthier relationship. Understand each other's personality — everyone's money mindset is different. Chances are one of you splurges while the other is more inclined to save
- Create money goals and work together toward achieving them. But if one of you turns away when talking about money, that's when problems arise.
- And if you're a financial nerd, stop using your “knowledge” to boss around your spouse. Instead, focus on each other's strengths and embrace your different approaches to money.
- Use your personality differences to build not only a healthier relationship but one that makes financial sense.
2. Wealth Increment
Building wealth as a couple may seem intimidating, especially in a new relationship. But actually, love and marriage can make you wealthier. Financial planning is crucial to increasing your wealth. As the saying goes, “Failing to plan is planning to fail.”
A detailed financial plan will guarantee everything is on track in several facets of your life, including budgeting, savings, investing, and retirement. Start by addressing the following questions:
- How many assets do you each have?
- What investments do you own?
- How much equity do you have?
- What are your outstanding loans?
- Do you have a saving pattern?
- What are your spending habits?
- When do you want to retire?
Finally, monitor your progress regularly by revisiting your plan and sticking to it.
3. Financial Independence
Achieving financial freedom is the goal for many people. Financial independence typically means having enough money, savings and investments to sustain the lifestyle you want. Many people fail to achieve it because they haven't set life goals. Other times things go awry due to unexpected events such as a pandemic or job loss.
With careful planning and discipline, achieving financial independence as a couple is possible. But you both need to set your goals in the various areas of your financial life, including:
- defining your long-term financial goals
- increasing your income
- checking your spending habits
- cutting back unnecessary expenses
- paying off your loans and credit card debt in full
- determining your investing objectives
And financial independence can also lead to early retirement.
4. Early Retirement
Early retirement sounds great. But if you can't agree on what's important, things can be challenging. It's time to get them on board by supporting and encouraging them so both of you can retire early.
While it's not easy to bring up the subject, you can start by mentioning your long-term financial goals. Then you can both work toward critical ones like retirement. Talk about retirement plans with your better half and how much both of you are willing to put into your 401(k) or IRA account. The more you save, the better.
Ways to Support Your Partner Toward Investing
You share nearly everything with your partner — your highs and lows — why not extend this togetherness to your finances as well? Here are five ways you can support your partner on the road to investing.
1. Talk About Money
Communication is essential to any healthy relationship, and talking about money is no exception. Discussing money early in a relationship is crucial. The earlier you both talk about finances, the better.
You don't have to wait until money-related issues come up before you can talk about them. That could be too late and lead to rash decisions. Schedule monthly dates to discuss finances.
You want to understand each other's financial background. Perhaps the way you view money is not how your partner views it. Working together helps you both make rational financial decisions.
Talking about how each of you earns money, how you'll spend and save, and how you'll pay down debt will shape your overall relationship with money. Also, discuss whether having a joint account is appropriate and who will be responsible for paying specific bills.
Smart couples talk about money frequently.
2. Set Money Goals
Being in agreement about your finances helps clarify your money-related goals. Discuss your financial goals together — short-term, medium-term and long-term goals — whether it's buying a house, increasing your wealth or traveling. Knowing these will help you work toward each of them.
- Next look at your budget closely. Develop a plan or strategy and then allocate your incomes to each category according to your priorities.
- Once you have decided on an amount of money for each goal, determine how to get to that amount. For example, if you want $30,000 for a down payment on a house in the next five years, you'll need to save $500 per month.
- Setting financial goals in a relationship is exciting. But you both should reassess them from time to time to make sure they're still relevant.
3. Be Honest
Honesty is not just about building a healthy relationship — it's the best policy for finances too. This means sharing all the relevant numbers with each other. Financial infidelity can be disastrous to marriage.
Be open about your spending — you don't have to keep secrets from your partner. Talking about your spending habits with your partner can change your financial behavior. If one of you is free-spirited, support your partner to change the habit and track expenses regularly.
No matter what stage of a relationship you're in, don't feel embarrassed to let your partner know about your debts. From student loans and car loans to credit card debt, it's crucial that both of you know how much you owe. This way, you can create a budget that will get you out of debt and work toward a debt-free life.
4. Establish an Investing Strategy
How you choose to invest your money as a couple depends on your goals. Whether you want more wealth or want to achieve financial independence and retire early, your investing strategy matters.
Remember, each of you comes into the relationship with different viewpoints, approaches and risk tolerances. So, establishing an investing strategy that can work for you both can be complicated.
- Whether you want to invest in real estate, the stock market or other assets, keep your short-term and long-term goals in mind. If both of you agree to invest in stocks, bonds or mutual funds, be sure to do your due diligence when choosing an online broker.
- If you prefer a more hands-off experience, a robo advisor could be ideal for your needs. A robo advisor will manage your portfolio based on your risk tolerance and goals.
- But you need to understand what each of you thinks is important. So talk about your investing goals.
- And diversify your investments to lower the risk. The couple that invests together stays together.
5. Financial Accountability for Both Parties
Keeping each other accountable to achieve your goals can help you stay on track. You don't just set financial goals and forget about them. It's crucial to be financially accountable for each other to meet your long-term goals.
And set up rewards to celebrate your successes. Each time you achieve a milestone, reward yourself with an evening out or whatever both of you enjoy. The goal is to keep yourself motivated to accomplish more goals.
Supporting and encouraging your partner comes with several perks, including a healthier relationship, wealth increment, financial freedom and early retirement. To achieve this, you both need to talk about your financial goals early on and be honest with each other.
If you've never thought of investing as a couple, these tips can help you work toward your financial goals together.