Tying the Financial Knot
A local expert shares crucial advice for couples.
Marriage is more than just romance. After the honeymoon, new couples face serious financial realities.
Amy Schubert, a senior vice president of private wealth management at U.S. Bank, has seen couples thrive – and she’s seen them make mistakes it can be hard to recover from. She shared her advice for smart decision-making here.
What do couples need to know about their finances when considering marriage?
Marriage has evolved. People used to get married predominantly for business reasons. Later, it was looked at as purely a romantic relationship. Now it’s both. It’s romantic love, but there’s also a financial partnership. That’s important to know. People aren’t always as open when it comes to talking about money as they need to be. When you’re planning to get married, you’re establishing parameters that will affect your future financial goals – either positively or negatively. Having conversations about money, being completely honest and transparent, will make that future much easier.
I would put it up there with the kind of conversations you would have about, say, if you want to have children. Your values around money, your goals, what you want to spend your money on, and when you want to retire, all need to be discussed in the same way.
What questions should a couple ask each other?
Some basic ones: How do you think about budgeting? Where do you prioritize your spending? Do you want to retire early? Would you rather travel more now than in retirement? Do you want to save money for our kids’ education? These questions help you get at the bigger picture of each partner’s financial outlook. Getting to know yourself before you get to know someone else is also a best practice. I always tell people to look at their own spending patterns – you spend money on things you value.
Are there financial factors couples might not realize come with marriage?
Marriage is one of the greatest ways to accumulate wealth, but it’s also one of the biggest risks. Wisconsin is a marital property state. Once you’re married, all your assets accumulated during that marriage are considered marital assets. That means if your marriage ends in divorce, there are real financial implications. So be mindful and consider setting up a marital property agreement either before or after you get married. When you’re delegating responsibilities in your marriage, you should not delegate all the financial responsibilities to one partner. If that partner passes away, or if something happens to your relationship, the other partner is too often left in the dark. If their partner made some sort of an error or was doing something untoward, it’s very difficult to unwind that later on.
What are some of the most common mistakes you see couples make?
Not working with an advisor. When you buy a house, no one would ever say you should handle all your own plumbing issues. But for some reason, people think you should be able to invest, do your own budget, and manage your cash flow all on your own. That’s just not reality in many cases. Working with an advisor will help you ensure you have a plan that’s in place and that you both understand the steps to take to reach your goals. Do your research on advisors. Read up on firms and talk to people in your network. Personality is important – make sure you find an advisor you feel like you can trust. You want someone who can tell you when you’re acting emotionally about your finances and really keep you on track. ◆
usbank.com/privatewealth
