Before they march down the aisle, engaged couples rarely discuss who'll pay the electric bill or how much to save once the knot is tied. Maybe they should.
Advisers who provide premarital financial counseling, particularly for first-time newlyweds, help make marriages more successful, according to financial advisers who offer the service. Those advisers find that they often get the couple as new clients.
Kurt Jackson, president of Central Coast Wealth Management LLC, said that he sometimes gives the child of a client a premarital financial assessment as a wedding gift.
“The best gift someone could give their kids is two hours with an experienced financial planner who will lay things out for them,” he said. “There is no better client service you can give than to help educate [a client's] kids.”
Many of Mr. Jackson's clients are high-net-worth families in which adult children often believe they understand money issues, he said. But they don't.
Newlyweds often have vastly different attitudes toward spending, saving and financial goals, which may lead to conflict, Mr. Jackson said.
“A lot of the problems that cause divorce have to do with money,” said Thea Glazer, principal of Glazer Financial Advisors. “The start is to know yourself. I bet a very small percentage [of those about to be married] ever thinks about how they feel about money.”
MONEY QUIZ
With the help of a family therapist, Ms. Glazer developed a money personality quiz that she has posted on her website.
When couples take the quiz and discuss the outcome at a premarital financial consulting meeting, many discover that their about-to-be spouse has opposing ideas about money. It is a very common situation that can be managed with good communication, Ms. Glazer said.
One newly married couple with whom she worked had “big issues” when it came to spending, she said. The couple, a medical professional and a stay-at-home wife, came to Ms. Glazer for help.
“He said she was overspending like crazy, but she didn't want to feel that she had to beg for money,” she said.
Ms. Glazer found a way to help them get along.
The couple started by getting a handle on spending by using an online budgeting program. They eventually were able to agree on a specific amount that each could spend with no questions asked, as long as both stayed within their limits.
Both were satisfied with the solution, which gave the husband the controlled finances he craved and gave the wife financial freedom. It improved their relationship, Ms. Glazer said.
“We are not trained well in the area of merging financial households,” said the adviser, who said that agreement over money issues helps improve marital harmony.
Research suggests that working with a financial counselor might help couples manage the stress of bad economic times.
According to a telephone survey of nearly 2,000 married Americans conducted by insurer Country Financial, about 24% of responding couples who work with a financial planner said that the recession had put a strain on their marriages. Of those who didn't have a financial planner, 35% saw strain from the recession.
For couples that are just starting out, some of the potential issues are predictable, and an adviser can help them sort it all out, said Keith Brannan, Country Financial's vice president of marketing.
“They need to be aware of how much is coming in on a day-to-day basis and who is responsible for paying the bills,” he said.
Years ago, most first-marriage couples combined their money in a joint account, but these days, that decision can go either way, Mr. Bannon said.
Country Financial's survey found that 73% of couples married before December 2007 have completely joint finances, compared with just 56% of those married afterward.
Ms. Glazer said that she often counsels couples, especially older couples or those in a second marriage, to maintain three accounts: his, hers and theirs.
“People seem to like that because you still have togetherness in running your lives, but you also have some flexibility,” she said.
For couples with widely disparate incomes, Ms. Glazer recommends that each contribute proportionately to cover regular monthly bills and that such decisions be made before a couple sets up housekeeping.
Nathan Gehring, a financial planner at My First Financial Planner, a service of Conceptual Investment Advisors Inc., runs a second practice for newly married couples, Couples Financial Planning.
Much of the insight he has into married couples' finances comes from his own marriage, a relationship of two people with very different views on money, he said.
“What I would really want to develop is for the two of them to communicate about the money they have, their financial history and financial upbringing,” Mr. Gehring said.
Most of Ms. Glazer's practice these days involves helping couples negotiate a settlement when they are about to divorce.
TAKE INVENTORY
From her experience in helping couples divide their assets and liabilities, she has learned that advisers should tell clients about to marry to create a comprehensive report on each of their accounts beforehand. Include all holdings and all debts to make a sort of balance sheet of where each person stands, Ms. Glazer said.
If things don't work out, “it's a lot easier if you know what you brought to the marriage,” she said.
E-mail Lavonne Kuykendall at [email protected].
