WEALTH MANAGEMENT EXPERT at EKS Associates Offer Tips for Investing When Couples are not in Sync Financially




(FEB 26, 2024; Princeton, NJ) — She spends money as fast as it comes in. You like to save it and watch it grow.

She is the hare – investing aggressively, in a rush to reach your financial goals. You’re the turtle, preferring to watch it grow slow and steady.

“They say opposites attract,” says Darren Zagarola, a principal with the wealth management firm EKS Associates in Princeton, NJ, “Whether one is a spender and the other a saver, or one is more willing to take risks in the market while the other is more conservative, the key to a good relationship, financially speaking or otherwise for any couple, is understanding and communication.”

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He asks clients at their initial meeting to tell him about their earliest memories of money. “It may take a few minutes for them to open up, but it is usually fascinating to see the partner’s reaction to the answer. For some, it is the look of recognition about the story, for others it’s the look of seeing something in their partner for the first time. We have also added the question – ‘What lesson about money do you remember learning from a family member that has stuck with you all these years?’ A couple should take time to understand why they make the financial decisions they do. And communicating those thoughts is important.”

For example, he says, one partner may want to pay off the mortgage and the other would rather have excess cash now to spend on lifestyle expenses. The former may have grown up in a house with depression-era parents who have seen people lose their homes due to the stock market and other economic situations. They may have been taught their entire lives that there is nothing more important than owning your own home – even if more money could probably be made in the stock market than the interest rate paid on the mortgage.

According to Mr. Zagarola, these conversations are important for couples to have:

1.    Will we keep our finances separately? And of so what will that look like? “Some couples have joint bank accounts and investment accounts that they funnel all of their earnings into and pay for all their expenses. Anything left over is then added to the joint brokerage account and invested in order to meet their goals. Other couples keep separate bank and investment accounts and each contribute equally to the joint expenses. There is no right or wrong method here. You just need to agree to this early on.”

2.    Are we saving for tomorrow or spending for today? A little of each is very important in a relationship, he says. “Discussing how you balance the two will go a long way into having an enriching life. You neither want to live frugally and never experience life with the goal that you might get to do it one day when you retire or have all experiences when you’re younger but now can’t afford to retire or do anything fun later in life.”

3.    How do we invest our portfolio? “We see clients who have this conversation for the first time when we meet,” he says. “They may have discussed the amount to save and spend, but how do they feel about the stock market? What are their investment beliefs? Equity investments vs. fixed-income investments? Active management vs. passive management? Individual stocks vs. funds?   What asset allocation should they have? How comfortable are they with market volatility?

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4.    How do we handle market volatility? “Will you want to sell assets when the market is volatile? Allowing your emotions to impact your investment portfolio is a sure way not to make money on your investments. And you do not want to have your partner resent you for any decision made?”

When is the right time in a relationship to have these conversations? “I believe you should wait until you are in a committed relationship,” he says. “As your relationship progresses and you start to share your goals and dreams, there is the evolution of asking the question of how one plans to meet those goals. It is not just a financial question. You must have a sound plan or any goals will not be achievable. And it is hard to meet those goals if you are not on the same page as your partner.”

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