Friends, Family and Finances
Relationships and finances can be very tricky; whether between parents and children, roommates or spouses. In fact, financial matters are the most common source of discord among American couples, prompting an average of three arguments per month, according to a survey conducted for the AICPA by Harris Interactive.
More than half of adults, 55 percent, who are married or living with a partner said they do not set aside time on a regular basis to talk about financial issues. This leaves them at a huge disadvantage. It’s important for all parties involved to be aware and understand where their money is going.
- Get full disclosure. Before saying ‘I do’ to moving in together or combining assets, people in a relationship should offer full disclosure of their finances as part of a joint financial planning process. And the disclosure shouldn’t end there. Each person should agree to routinely review credit card accounts, bank statements and credit reports to ensure all data stays in the open.
- Set a money date. At least once a month—and preferably weekly—set aside time without other distractions to meet about family finances. This ensures an ongoing, open dialogue about money at a time when both people can free themselves from outside distractions.
- Divide and conquer. It’s typical in a relationship for one person to take the role of chief financial officer, managing accounts and paying bills. This arrangement can lead to unnecessary stress, tension and, at times, confusion. Split the duties. One person can act as bill payer, the other as money tracker, for instance. This removes the burden from one person and provides a check-and-balance on the family finances.
- Hire an advisor. A neutral third-party is sometimes the best option to diffuse or avoid tensions over money. A financial advisor can work with couples to establish financial goals, pay bills, monitor accounts and help notice any unusual spending patterns, should they arise.
“Money is a lightning rod for conflict in relationships because it’s a sensitive topic and each person brings a different perspective based on their past experiences,” said Jordan Amin, chair of the National CPA Financial Literacy Commission. “It’s critical for couples to communicate openly and regularly about financial matters in order to establish a common language around money and move toward shared goals.”
What tips do you offer your clients for successfully co-managing their money?
Melora C. Heavey, Senior Manager - Communications, American Institute of CPAs. Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig. She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.