Are you married or in a relationship with someone who isn’t exactly financially savvy? This is normal for many relationships, but it’s important to understand your spouse’s views on money and encourage them to become financially independent by learning how to budget, invest, and start investing for retirement on their own.
While money management was traditionally a husband’s job, Time Magazine reported in 2014 that a significant number of wives now bring in as much, if not more, money than their husbands and consider themselves very knowledgeable about personal finance matters. While there is less of a gender gap nowadays, budgeting and other financial responsibilities still tend to fall to one person, instead of making it a team effort.
Make 2018 The Best Year Yet!
Get our FREE checklist of money moves you need to make right now to have an amazing 2018!
How to Help Your Spouse Start Investing
We’ve already covered the issue of splitting expenses with your spouse here, but what about investing? Here are a few considerations to make when getting your spouse involved in investing:
Team Effort Matters
If you’re struggling with a spouse who is terrible with money management, then you should start with the basic fundamentals of personal finance before you even consider exploring potential investment options for them. Even if you already have your budgeting and saving system completely under control, find ways to involve your spouse in these processes to develop a sense of synergy together when it comes to money.
All too often, couples avoid talking about money altogether in hopes of preventing conflict and stress. But, not communicating about this crucial part of your relationship won’t help you any more than fighting about it does.
Instead, embrace a mindset that views financial matters as a team effort. Including respect for your spouse’s unique perspectives on spending and saving, as well as compromising strategies for instances of disagreement. Even if your spouse is more of a spender who wants to keep up with the Joneses and you’re a super saver who accounts for every dime in your budget, clashes about relationship finance can be kept to a minimum if you maintain an equality-driven approach to your shared financial decisions.
Once you’ve established a framework for confident and conflict-free financial management as a couple, it’s time to introduce your spouse to the world of investing. This is a delicate process because anyone who isn’t well-versed in complicated financial topics may feel overwhelmed about their investment options and want to give up if you’re not patient and carefully explaining different aspects of investing to them.
Even if your spouse thinks they don’t have enough money to start investing, your job is to convince them why investing matters and develop strategies that will allow them to eventually invest independently of your careful guidance. You can start off by explaining what investment options are ideal for your ages, incomes, and lifestyles.
For example, using bonds for a conservative portfolio. Be sure explain how you currently manage your own investments so they can learn from example and apply your lessons to their own portfolios. This is also an excellent time to calculate how much you can afford to put away in investment accounts each month.
Human or Robo-Advisor?
Thanks to the development of algorithm-based investment advising websites like Betterment and Wealthfront, you are no longer limited to price human investment advisors. Instead, you might encourage your spouse to open an investment account with a robo-advisor and enjoy the lower fees, high-tech market analysis, and advanced online management dashboards that robo-advisors have to offer.
However, if you currently invest with a financial advisor, then it might make more sense to open an additional account with them. The choice is yours, but it’s worth exploring the pros and cons with your spouse so they have some say in the matter.
If you’re looking for places to keep your accounts, you might want to check out investing with Betterment or Stash Invest. Both are great options for people looking for easy ways to get started investing.
Financial transparency is essential for marriages. Even if you’re more financially savvy than your spouse, it’s still worthwhile getting them involved in the process of investing. After all, financial management is like a team sport and relegating all of the retirement planning, budgeting, and bill payments to one person can lead to problems later on. To avoid conflict about money and achieve financial independence, encourage your spouse to learn about investing. It’s is a solid strategy for any long-term relationship.