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Saying "I Do" to Financial Planning

While many couples put energy into choreographing every moment of their wedding celebration, less than a third of them think they are doing a very good job setting up a financial plan before they tie the knot.

Lincoln Financial Group recently conducted its "Lincoln Love and Responsibility Survey"  and determined even though 92% of couples feel setting a financial plan is important before saying “I do,” only 27% feel they are doing a very good job making it happen1. The survey also discovered that only 37% of couples talk to each other about their financial future.

The results are not shocking to me. Like many financial planners, I know finances can be a sensitive subject for a lot of couples. According to a new survey by Ramsey Solutions, financial disputes are the second leading cause of divorce. Results show that both high levels of debt and a lack of communication are major causes for the stress and anxiety surrounding household finances.

This anxiety may result from philosophical differences about money. For example, if one person is a big spender who uses credit cards, but their partner prefers to budget by spending only cash, disputes are likely to occur. Thankfully, it does not have to be that way, especially for those who are starting a new life together — whether it be a first marriage or a merging of two families. It’s beneficial for couples to recognize any philosophical differences and find a compromise on their vision of financial responsibility before it becomes more complicated.

Planners and their clients need to be able to sit down and talk openly about the couple’s money, finances and retirement goals to effectively plan their future together. If it happens on an ongoing basis, it won’t feel as intimidating for your clients. Help ensure they’re still together for many anniversaries to come by leading constructive conversations about their financial future. Here are some topics to keep in mind:

Start with three objectives

1. Define their goals

Encourage your clients to think long-term. Go beyond immediate goals they may have, like home ownership or travel, and make sure you talk now about retirement — specifically, when your clients would like to retire and the life the couple envisions. 

2. Create a budget

I suggest clients lay out all their expenses, so they can really see where their money is going. After they have paid their routine monthly bills and handled any household basic needs, how much are they putting toward savings, retirement or other financial security concerns? A successful budget requires prioritizing, and transparency between partners is key.

3. Design a financial plan

A financial plan is very different from a budget. A budget looks at how money comes and goes, but a financial plan is a more holistic roadmap for the future, taking into account a couple’s goals, their savings and their expenses to help ensure they have a positive financial outcome down the road.

If clients are having a tough time discussing their finances, I recommend that they take a breath and decide what is right for them. It is okay for them to tap into online resources to educate themselves on the basics or ask friends or family for recommendations.

I firmly believe, that just as some couples use a wedding planner to ensure their big day is perfect, it’s even more important that they consider making an appointment with a financial planner to provide a tailored financial approach toward achieving their long-term goals as a couple and a family. 

Caragh Fahy

Caragh Fahy is Owner and President at Madison Financial Planning Group in Syracuse, NY with 20 years of experience in the financial services industry. A CERTIFIED FINANCIAL PLANNER™ with Lincoln Financial Advisors Corp, Caragh specializes in fee-based financial planning for retirement transitions, guiding clients through the critical decision-making years of early retirement.

  

Caragh Fahy is a registered representative of Lincoln Financial Advisors Corp.