Merrill Center for Family Wealth® just released a practical guide for couples navigating wealth together.
Disclaimer: I have no affiliation with the Merrill Center for Family Wealth®. I strongly encourage those seeking financial advice to consult with fee-only experts who do not share commission-based products and/or a financial planner legally bound to put your interest ahead of theirs.
The Merrill practical guide is a step-by-step process couples can use to discuss money. Its suggestions originate from a series of interviews with clients.
Step 1: Reflect on the past and the present
The suggestion of starting the process by identifying core values and each individual's primary financial tendencies is certainly a best practice. The report shares the fact that most of our financial behaviors stem from the money messages we heard as children.
"I didn't realize the extent to which I still have my mom's voice in my head when it comes to spending, and it wasn't until I paused that I realized how it was affecting my choices today — as an adult — and my relationship." – 38-year-old entrepreneur, newly engaged
Essential advice
Instead of resenting each other's differences, the couple embraces them.
Step 2: Add, subtract, keep
Think about your past and where you are now as a couple. What do you hope to preserve in your current life? Would you like to cut away anything, and what would you like to add? Do your money messages need to be updated to reflect your current life?
Add
What new opportunities can wealth provide to enhance our quality of life and create new shared experiences, such as hobbies, travel, philanthropy, or educational pursuits?
Subtract
Which unwanted aspects of life can this new wealth help us eliminate?
Keep
What do we do now that we want to keep doing? Put another way: What core values would we like to maintain?
Essential advice
I am of the strong opinion that for busy dual-career couples, this conversation centers around how you can do the following:
Reduce or eliminate stress in your life.
Create joy and happiness in your life.
Step 3 Communicate — and acknowledge contributions
How and when do you talk about money? Are you acknowledging everyone's contribution?
The following extracted from their report cannot be understated:
"During one of their discussions, Raj and Carmen reflected on the fact that both their fathers had been the breadwinners, and their mothers had tended to almost all domestic care. In fact, Raj's mom was a stay-at-home mother and had never worked outside the home after she married.
For Carmen to take on greater financial responsibility for the family's housing expense was a remarkable shift from what they witnessed as children growing up. With this awareness and Carmen's reassurance that she appreciated the many ways Raj contributed to their partnership beyond the financial, Raj eventually felt more comfortable. He agreed to Carmen taking over a sizable portion of the mortgage.
'One of the simplest, but most effective, things we did is schedule time each month to talk about what was coming up, including kids, family and money.'
'I found that we were in a better space to tackle the hard stuff when we knew it [the conversation] was coming.'" — 49-year-old client, married three years (second marriage)
Related: What is a Money Date?
Step 4 Define purpose
What's your shared vision for your life together, and how can your wealth help you achieve that?
My wife and I love to purchase one lottery ticket and discuss what we would do if we won. We know we are not going to win, but it's fun to dream, and more importantly, it helps us identify whether our life now is being lived with purpose.
For example, we both agreed that if we won the lottery, we would not quit our jobs. This tells us that our careers have purpose.
Remaining report
Click here to download the full 19-page report, which includes the remaining steps:
Step 5 Develop principles and policies
Step 6 Consult trusted advisors
Step 7 Celebrate
Step 8 Revisit
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