Experts: 6 Biggest Money Mistakes Married Couples Make

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First comes love, then comes marriage, then comes money. It’s far from romantic, but how we manage, discuss and generally deal with financial matters is of paramount importance in a union of any kind. Plus, we know that money arguments are one of the biggest reasons for divorce.

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Because of the heavy role that money plays in so many aspects of our lives (even our love lives), it’s necessary to have open communication with your partner about everything finance related. To get a clearer idea of just how to do this, GOBankingRates consulted certified financial planners to get the lowdown on the biggest money mistakes couples make (as they observe in their practice) — and how to avoid them.   

Not Making an Active Decision on How to Handle Finances Together 

Handling money isn’t just something you let happen; it’s something you must take control of, and couples need to establish a plan of attack together. 

“Have a conversation with your partner to determine what will work best for you,” said Kendall Meade, CFP at SoFi. “Remember there is no right or wrong, each relationship is different and so the way that you manage money may also be different. The most important thing is to make sure that you still discuss financial matters and make the decision together. This can help alleviate future concerns or conflicts. There are three main strategies that I see couples use:  separate, combined or hybrid.” 

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Meade went on to break down exactly what each of these strategies looks like.  

  • Separate: “For those who decide to keep their finances separate, each partner keeps a personal account for their own income and spending, but both partners decide who pays for what expenses.”
  • Combined: “Both partners manage all income and spending out of one joint account, with the goal of having the least amount of accounts possible.” 
  • Hybrid: “Joint account for shared expenses, joint account for savings/goals and each partner keeps a personal account for their own income and spending. There can be multiple versions of this approach. Each partner can contribute to the joint account/expenses equally or it can be more of a ratio based on the income of each partner.”

Assigning One Partner as the ‘CFO’

Which of you is better at communicating about and handling money? That’s a trick question. The answer should be: We are equally well equipped. But too often the role of “CFO” falls on one person in the marriage. 

“It’s common in marriages for one spouse to be the family CFO and the other spouse may or may not want to take on that role,” said Patti B. Black​​​​, CFP, partner at Bridgeworth Financial. “That division of labor may work for many years, but will prove to be a big mistake [if] the CFO dies, becomes incompetent or they divorce.”

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Not Having Estate Planning Documents 

Another big mistake Black observes is couples not having estate planning documents. 

“Yes, there’s a cost to getting a will, power of attorney and advance healthcare directive, but it will save so much money and stress in the long term,” Black said. “It’s also critical to make sure that beneficiary designations on retirement accounts and life insurance policies, which will pass outside the will, are in order.”

Striving To Impress Partners With Gifts

In our consumer-driven society, it’s perfectly normal to want to give gift after gift to your partner. But this can have a bad financial impact. 

“Many Americans’ primary love language is ‘receiving gifts,’ but being able to afford those gifts isn’t always possible,” said Dr. Kate Mielitz, who holds a doctorate in financial planning and is building a financial counseling program at Beyond Finance. “Talking about a gift-giving strategy will not take the fun and romance out of spontaneous gift giving! It means that we will discuss how much money we have available for that line item in our budget.”

Contributing to Only One Retirement Plan 

Certified financial planner William Bevins said some couples are contributing only to a single retirement plan through their workplace. This is a mistake. 

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“Clients consider it a significant accomplishment to contribute the maximum amount allowed by one plan and receive the highest matching contribution from their employer,” Bevins said. “Many people don’t realize that if they split their contributions between both plans, they can receive matching contributions from both employers. I recommend that clients research because each plan is unique. Over the years, even a small difference such as the additional 3% that remains unclaimed can amount to a significant amount.”

Not Bringing in a Professional Third Party 

Communication (or lack thereof) is essentially the biggest money mistake, and one that is attached to each of these individual mistakes. But talking one on one can be tricky, especially if you’re not on the same page with your partner. This is why it could be a mistake to not bring in a professional third party.

“Often bringing in a third party, such as a financial advisor or money coach, can help couples communicate more effectively about their finances in a non-judgmental and safe manner,” said Julian B. Morris, CFP, principal at Concierge Wealth Management. “When interacting with a third party that facilitates communication, both partners are able to feel heard, discover views about their partner and hopefully have a plan to move forward.”

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