Divorce rates in America have been on a downward trend for almost two decades. However, studies of divorced couples reveal a consistent pattern of underlying factors, with three most commonly cited: infidelity, money, and communication. I often find myself unpacking issues of money and marriage with my clients, so I’d like to share some insights I’ve picked up along the way, with actionable tips for transitioning money from a potential source of marital strain to a blessing.
Thinking Longer and Deeper
My clients often ask my advice on what they should be thinking about as they get into a business partnership. I always challenge them to think longer and deeper. Don’t get caught up in what product you are going to sell, what bank you will partner with, or who your first hire will be. Instead, sit down with your potential partner and ask, “What will this company look like in 10, or even 20, years?” The same holds true in marriage when you are committing yourself for a lifetime.
When it comes to finances in marriage, I think we can benefit by thinking longer and deeper. Stop asking, “How much should we spend at dinner tonight?,” and start asking, “Over the next 10 years, how much of our earnings do we want to spend eating out?” That’s such a different question, and, if approached thoughtfully, potentially a liberating and empowering discussion. The answer can reduce in-the-moment concerns that can bog down a marriage with nitpicking on every purchase.
To be clear, these conversations are also part negotiation. My wife and I love to test our marriage, including with a recent remodel of our house. At first, it went terribly. We negotiated (some might say fought) over every aspect of the project. What style of countertop, what level of heating, which painter should we hire, what fixtures should we use? Our negotiations weren’t driven by style differences, but rather by cost. After weeks of draining conversations, joyless trips to cabinet shops, and boiling-point levels of stress, we zoomed out and started asking bigger and deeper questions. We asked, “Given our current and future income expectations and our family’s mission statement and values, what amount do we think is reasonable to spend on this project?” “What potential alternatives would we use this money on, and are we comfortable giving those up?” Though our answers were never the same, we found common ground on which to build a plan that matched our family’s goals.
Anchoring in Reality
Conversations about money are everywhere, and, thankfully, it’s become less of a taboo subject. Millennials and Gen Zers are more comfortable discussing topics like salary information, retirement savings, and the costs of big purchases over drinks with friends. I believe we should be doing the same with our partners, and amid that transparency, we need to be ruthlessly realistic, and answer one key question: “What amount of money is realistic for us to earn?” My own experience leads me to believe that many of the most severe money problems in marriage are caused when both partners don’t answer this fundamental question.
It’s easier than ever to get captivated by the lifestyle we want, and forget to be realistic about the lifestyle that is possible. I recently took a mental health survey through Curi RMB Capital’s employer benefits program, and one question really stood out to me. “On a scale of 1 to 10, are you living your best life possible?” The word “possible” is what made it jump off the page. It added an element of realism to the question. Had that word not been there, it would have been easy to start playing the comparison game.
Whether you're on Instagram, on TikTok, or in your community, your brain is hard-wired to find those with more, and use them as the benchmark for success. “Keeping up with the Joneses” is more prevalent and more pernicious than ever. I often recite this personal mantra: Don’t let your strongest desire get in the way of your deepest desire. Social media and marketing algorithms excel at identifying our strongest desires. Recognizing how those desires may conflict with your deepest desires is an important step in both marriage and money. Sharing those openly with your spouse is an expression of vulnerability and support that can draw you closer, and keep you aligned in your financial plans.
1 Craft a family mission statement that articulates your goals, dreams, and desires.
2 Use that mission statement to craft a plan for future earnings and spending.
3 Meet once a year for a “State of the Union” discussion of your mission statement, and how your earnings and spending aligned with it that year. Come up with three action items for improvement.
4 Practice being vulnerable, considering things longer and deeper, and rooting your dreams in reality.
5 Meet with your financial advisor once a year to reaffirm your mission statement and financial plan as a team.
Owning Our Baggage
Owning our money baggage and unpacking it with our partners is vital to fostering growth and understanding. I began working with a couple several years ago, and from our first meeting, there was a strong disconnect between their level of risk tolerance and proposed spending. Several months in, I asked them both to tell me about what their parents did with their money. The husband spoke of his father managing his own retirement money, and losing almost all of it, along with his job, when the tech bubble burst. His family had to sell their home, and his mom went back to work to make ends meet. The wife said her parents never talked about money. Everything she knew, she learned from friends or online — but she never felt particularly confident about the information she was given. During that conversation, I think for the first time, they both understood the money trauma the husband had experienced, and why he never felt optimistic about investing. They also began to understand that the wife had a good grasp of finances, but felt it was never appropriate to discuss the subject with her husband.
I’m pleased to say that, with coaching, continued open conversation, and experiencing the fruits of being a long-term investor, they built a plan that gives them both confidence in their financial future. Their trauma and biases may never disappear, but they own them as part of their story, and they can recognize when the baggage might be negatively impacting their decision-making. Sharing baggage with your partner can help you craft a goal-driven plan and make daily choices that stay true to your plan and values.
The opinions and analyses expressed in this presentation are based on Curi RMB Capital, LLC’s (“Curi RMB Capital”) research and professional experience are expressed as of the date of this presentation. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future performance, nor is it intended to speak to any future time periods. Curi RMB Capital makes no warranty or representation, express or implied, nor does Curi RMB Capital accept any liability, with respect to the information and data set forth herein, and Curi RMB Capital specifically disclaims any duty to update any of the information and data contained in this presentation. The information and data in this presentation does not constitute legal, tax, accounting, investment or other professional advice.
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