Be Prepared
Of course it's much better to prepare, to run a financial stress test, before crisis strikes -- or that great opportunity appears. To do that, though, you have to get your partner to listen.
Jennifer, a 40-year-old San Francisco lawyer, had broached the topic of joint accounts with her husband, Richard, several times in their six-year marriage. (Both names have been changed.) He dismissed it; she felt too hurt to push. Things worked well enough when they both were employed full-time. But with two young kids, Jennifer now works 30 hours a week, earning about $82,000. With Richard, an engineering consultant, making more, most of the family cash ended up in his accounts.
This past spring, Jennifer drew up a spreadsheet showing where their money was going and a list of questions to consider: Were they saving enough for retirement? Could they afford to take the kids abroad every year (a priority for her) or to buy an airplane someday (his dream)?
The hard numbers cracked Richard's resistance to advance planning and setting priorities. They agreed to merge some of their accounts and track their spending and goals together. "I feel closer to him now, like real partners," she says.
As with many worthy goals, launching into major financial discussions is almost no one's idea of a good time. Many serious talks are planned, but few actually take place. The trick is making them about how you can use your money -- and, usually, how you can make and save more of the stuff -- to get what you both want out of life. Ask each other: What do you want to do in the next decade? If you had only a year to live, what would be most important? "You have to unleash the dreamer," says Elizabeth Jetton, 52, a financial adviser in Atlanta.
Getting out of the house -- changing your perspective, quite literally -- can jump-start your creativity. It's no coincidence that Tackett and Barbaria's epiphany came in a Napa restaurant or that Jetton and her husband combine money planning with hiking in a state park. Likewise, Vicki and Don worked out a 10-year financial plan during a trip to the Rocky Mountains. A less exciting but still effective outing: a trip to your adviser's office to have the big-picture talk about finances, with him or her as moderator.
The wrap-up of your mid-nup should be a pact: No matter how busy you are, how painful it may be, or how unnecessary it may seem, you agree to sit down and do it again -- monthly or quarterly.
For Vicki and Don, the financial full monty brought them closer and helped them clarify their goals. They had talked of buying a bigger house or investment properties, but during their Rockies escape this spring, they realized they were already living in their dream home. Instead of buying any more real estate, Vicki says, "we're going to pay off this house in the next five years."
The sense of freedom they've gained has paid relationship dividends. "It takes a lot of emotional maturity to be so open, and it's scary," Vicki says. "But it comes back to you twofold or more." That's a rate of return any adviser would endorse.
Christine Larson is the coauthor of The 7 Most Important Money Decisions You'll Ever Make.
Originally published in MORE magazine, November 2007.
