Marriage and Finance: The Naked Truth

A financial expert tells why your marriage might need a "mid-nup" finance assessment.

By Christine Larson
Photograph: Photo by: Comstock

Marriage and Financial Honesty

This isn’t about hidden assets, a Cayman Island account, and a love nest funded behind your back. The fiscal danger you’re likely to face at midlife isn’t a charlatan partner; it’s the joint self-deception of laissez-faire finance, the failure to question longtime habits and your unspoken deals and assumptions.

For some couples, that means simply not talking about money; for others, it means having the same dead-end fights over and over. Either way, by midlife many couples have fallen into fixed money patterns that lead, at best, to missed opportunities (you could have left that soul-killing job years ago; you could have gone back to school for that art degree) or, at worst, to financial chaos.

It doesn’t matter how successful or savvy you are. Nearly any couple can succumb to the comfort of habit and assume that both partners are on the same financial page. Earlier this year, Fidelity Investments surveyed midlife couples with a minimum of $75,000 in income or $100,000 in assets. The wives and husbands weren’t exactly in sync; for example, 39 percent disagreed on when the wife planned to stop working.

Even couples who signed a prenup or set ground rules for their finances at the beginning of their relationship can’t count on those understandings to carry them through all the changes that accumulate by midlife: kids who have moved out, aging parents to care for, shifts in the economy that change investing and job options.

Sooner or later, most couples need a "mid-nup" summit, a no-holds-barred review. The payoff? Relief, especially if there has been anxiety or fighting. Clarity. And, often, renewed intimacy. And then there are the financial rewards. "You’ll have better returns on your investments because you’re not putting your head in the sand and you’re working in partnership," says Carrie Schwab-Pomerantz, author (with her father, financial services honcho Charles Schwab) of It Pays to Talk: How to Have the Essential Conversations with Your Family About Money and Investing.

Financial Roles

Most partners fall into financial roles early in a relationship and stay put, as they do after picking a side of the bed. A 2005 survey by OppenheimerFunds found that women are often in charge of budgeting (67 percent said they balance the checkbook) but less likely to choose investments (only 25 percent buy the family’s stocks and bonds). Less than 20 percent of couples say they have equal responsibility for investing.

A division of labor may let each partner play to his or her strength, says Candace Bahr, a founder of the Women’s Institute for Financial Education. The downside is that many couples stop — or never start — communicating exactly what they’re doing. "When things get dropped or change, fingers are pointed," says Holly Thomas, a Tampa, Florida, financial planner.

Having one person handle everything isn’t necessarily a bad system, as long as there’s transparency and the other partner stays interested. Too often, one partner abdicates, Schwab-Pomerantz says. Instead, both have to be accountable, willing, and able to "challenge or question each other’s decisions.’‘

In her 30s and 40s, Vicki played bean counter and chief investment officer in her marriage. (Because money was such a heated issue for her and her ex-husband, and to maintain his privacy, we omit her last name.) As a self-employed real estate agent earning six figures, she says she was more comfortable with money than her husband, who earned less. "There was no discussion," she recalls. "I did all the check writing and handled everything." Vicki never showed her husband the books, she says, and he never asked. "I honestly think the barriers were emotional," she says. "He didn’t want to deal with the fact that he didn’t make as much money as I did."

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