People committed to one another can work through minor disagreements over things like where to vacation, but financial conflicts can end relationships if both partners can't agree. That's another reason why comprehensive financial planning is a worthwhile task all committed couples should take on together. The challenging conversations about money inherent in the process can occur in the neutral setting of a financial planner's office and seem less pressurized than having those conversations privately.

FINANCIAL PLANNING FOR NEW COUPLES

As a relationship becomes serious and you begin to plan for a potential future together, financial planning is an opportunity for both partners to get on the same page about how you'll handle money jointly and individually. If you are moving in together or are discussing marriage, it's time to involve a financial planner.

Some topics new couples may discuss with financial planning advisors include:

• Aligning your financial philosophies. This may be the first time you discuss questions such as: How do you feel about saving vs. spending? How do you each feel about debt? How do you each like to spend your disposable income? If you're considering having kids or already have kids from prior relationships, how prepared are you to share those expenses? What do you envision as an ideal retirement?
• Making a budget and a plan for shared expenses. Agreeing on a clear-cut, manageable way to share expenses is critical in preventing conflict later. If you plan to live together or are planning your first big vacation together, will you split every shared expense 50/50? Will you each contribute to a joint account in equal, or unequal amounts based on your earnings?  There are many ways to approach the division of expenses, and talking them through with an advisor can help couples make well-informed decisions.  

FINANCIAL PLANNING FOR ENGAGED COUPLES

Congratulations, you're engaged! Now what? Even if you've been together and sharing finances for years, engagement creates a few new financial planning tasks you'll want to work out before walking down the aisle.

• Tax planning. Tax Day may be months away, but engaged couples can consider tax strategy before getting married. Will you file jointly? Your individual tax brackets, debts and assets may affect that decision. Talk about how marriage will change your tax picture to avoid surprises later.
• Setting financial expectations around wedding/honeymoon expenses. Money conflicts only compound the stress of planning a wedding. Don't let budget fights taint this happy time or let overspending force you to start your marriage in debt. Financial advisors can be an excellent resource for helping couples set reasonable boundaries around wedding and honeymoon budgets.
• Setting long-term financial goals. Engaged couples should talk through questions like, what are our long-term financial goals as individuals? What are our long-term financial goals as a couple/family? Do we anticipate supporting aging parents or other family members in the future? Do we have charitable goals? Are there high-value assets or luxury vacations we want to save for? What criteria are we going to use to make financial decisions?
• Prenuptial Agreement.  Does it makes sense for a couple to consider a prenuptial agreement, to decide how current and/or future asset accumulation would be handled in the event of divorce?  While not the most romantic of conversations, discussions around this topic often provide comfort to both the wealthy and non-wealthy members of the union.

FINANCIAL PLANNING FOR MARRIED COUPLES

Even if one spouse is more active in day-to-day money management, both partners should participate in ongoing financial planning. Jointly meeting with your advisors once a year creates an opportunity to discuss issues and ask questions until you both feel comfortable with your understanding of your current financial picture.

Routine financial planning tasks for married couples may include:

• Reviewing budgets and savings/investment strategies. In couples where partners have mismatched philosophies about saving vs. splurging, looking at monthly and yearly budgets can be a helpful check-in to review if you're on track with your plan.
• Creating/reviewing education savings plans. For parents with young kids, checking your education savings accounts should be a annual task. Decisions about how much you will contribute to these accounts in the coming year and assess how well your current savings strategy is aligned with the child(ren)’s needs are some of the goals of the annual review process.
• Discussing retirement timelines and Social Security plans. Your thoughts about when you'll retire and claim your Social Security benefits may change as your health, job and financial circumstances change. Financial planning allows married couples to share their current thinking.
• Estate planning review. Married couples may update their estate plans dozens of times over the years for a variety of reasons. Estate planning should correspond to life events such as welcoming a new family member, divorce, an unexpected health issue or when someone passes away to name a few. Should your estate planning documents become outdated, it could mean your wishes are not followed, or your loved ones won't receive the inheritance you intend. 

CONTACT SACHETTA FOR HELP WITH FINANCIAL PLANNING AS A COUPLE

Jeff Aron manages all aspects of Financial Planning and client services, including the preparation of comprehensive financial plans (retirement, education, cash flow, etc.), insurance and asset allocation recommendations, advanced estate planning strategies and of course, plan implementation. He specializes in servicing the unique planning needs of high net worth individuals and families, with a depth of experience covering all aspects of financial and estate planning.