Saving & Investing
Include your spouse when making financial decisions
September 19, 2013
Rebecca Katz: A question actually for Mary. You mentioned, Chuck, you mentioned spouse. How often when you're talking to clients, is it just one partner in a relationship, or are you seeing an increasing trend of people coming together with their spouse to go through this?
Mary Ryan: I'm seeing a bit of an increase, but it's still—we call it the "silent spouse"—and I think it is really important to bring that spouse in because they want to be part of it. They need to know if they're budgeting and what they're looking for. It's amazing when I talk to people and I bring in the spouse, and they'll say, "No, we really are spending a lot more than that on whatever it is," or, "I know you're talking about this particular goal, but can we talk about that?" It's really having a deeper, better conversation if you can talk to both parties, and I don't know that both parties are always talking. I think that's very important.
Earl Harley: I found that to be the case, too, and I always like to encourage my client—because almost invariably—I'll say 90% of my clients, it's one or—it's either the husband or the wife but not both. I always like to have both people in our conversations because they have—they think they have the same goals. They think they have the same things in mind. That's not always the case. Also, it's good because if only one person is handling everything, what happens if that person can't for some reason? Now, somebody all of a sudden has got to step in and that can get ugly.
Rebecca Katz: We have a question from Jennifer in Kearney, Nebraska, and she sent this one in advance and I remembered it. She says, "How do you get a spend-y spouse on board with saving for financial goals?" Not that I have a spend-y spouse, but I'm sure this resonates with a lot of people. They have one spouse who's a saver, one's a spender, and you're not going to meet your goals if you can't agree on that. What do you tell them?
Earl Harley: I've got a client in Texas—I won't mention any names—but this individual is regularly calling me up and says she wants something else. How he reins that in—and it doesn't always have to be him versus her per se. Sometimes he's the spender, and I've got other clients like that.
Rebecca Katz: Sometimes it's a male.
Earl Harley: Exactly right. Trying to rein somebody in is a lot more than financial planning, I think. But if you can, if you—we like to show people in illustrated ways, the effect of going overboard and spending or even the effect that modest changes in your spending habits—the positive effect that a modest change can make. I think oftentimes people think, if I've got to make a change, it's got to be a big change. I've got to cut 10%, 50% out of my budget or something like that, and that will hurt.
But if you can show people the numbers and show them that even a modest change can make a big difference over the course of 20, 30, 40 years, that is very helpful. We talked in the beginning about bringing both spouses to the table so I can talk to both people and share that information with everybody, I think that's helpful.
Rebecca Katz: Are there questions that you find helpful when you're talking to spouses to try to draw that out and make sure everyone's on the same page?
Mary Ryan: We do—I do and I do try to talk to them. And again, the numbers are helpful, but I think a lot of times the silent spouse, the reason they're silent on this is they really don't care about the numbers. But I think painting the picture for that silent spouse, a painting what the future can be and where things are and how a simple change can make a big difference—that's something I found to be very helpful. And I have a situation with a client as well who, she is, I mean, talk about keeping those numbers, boy she is really good at it. And he's, "Yeah, that's great," but he doesn't want to stop going to get his sandwich every day, he doesn't want to bring his lunch and all of that. But we've all started talking, and I realized what his hot button was; he wants to retire early. Great. Let's paint the picture of retiring early. What does it look like? What does that mean to you, and how are we going to do this together? And that has made a huge difference in him coming on board with us and being willing to give her the receipts so that she can put it on the spreadsheet and keep track of everything.
Chuck Riley: I think it's a great point. It's really finding out where that client is at and what their hot button is. You know, I would not recommend saying—if you're the nonspend-y spouse—saying, that's it, you're cut off, you know, and not just from a relationship standpoint, but because it just doesn't work. There's a reason behind—and one thing I love about money is that it ties into our behavior; it's a vehicle that we use for what we would like to do. And whether it's freedom or security, there's a reason that client is spending the way they do. Maybe when they were growing up they didn't have a lot. So now they have money, and so it's like, why would they restrict themselves?
But when you customize it to what is that client's really—what's their priority? And you start to focus in on that, all of sudden the light bulb goes on, and you start to get that buy-in. If you're that spouse, you had insight into your spouse that there's no way that we're going to have. And that's where you can really use us to leverage, to talk about the numbers. I love numbers because numbers don't, they don't lie; they tell the truth. They tell cold hard truth a lot of times, but if you can kind of couch it in a way and get it to where the other spouse comes on board more gently, you know, it can be a great success.
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor.
This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation.
© 2013 The Vanguard Group, Inc. All rights reserved.
Communication is key when couples plan their goals
Can we talk? Couples often don't when managing the family budget. Mary Ryan and Earl Harley of Vanguard Asset Management Services™, along with Chuck Riley of Vanguard Advice Services, detail the challenges of getting couples on the same page and finding out what they really want from their financial life.
Other excerpts from this webcast:
- Planning your finances: How to get started
- Creating your personal budget
- Words of wisdom from Vanguard financial planners
- All investing is subject to risk, including the possible loss of the money you invest.
- Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
- Advice services provided by Vanguard Advisers, Inc., a registered investment advisor.
This webcast is for educational purposes only. We suggest you consult a financial or tax advisor about your individual situation.
© 2013 The Vanguard Group, Inc. All rights reserved.