When Your Spouse Thinks Your Money Strategy Is Crazy – Episode 691

Transcript provided by the show’s production team.

[00:00] Spencer Shaw: Prosperity Thinkers, welcome to the podcast. The title of this one is When Your Spouse Thinks Your Money Strategy Is Crazy. How about that for being a little bit sensational? You get to hear from a variety of people people that you’ve coached, meaning other financial experts, and they’ll share their stories with you clients that you’ve worked with, maybe even family. We’re not gonna go in the family stuff. So what happens when the spouse is, the spouses are not on the same page? Kim Butler: I think it’s more common than most people would want to admit because as my husband Todd Langford likes to say, “Opposites attract until it gets annoying.” And this is one of those areas that can be very annoying, and it is very common that you have one spender and one saver. I see this with families with kids too. For whatever

[01:00] reason, one kid will tend to be a spender, and one kid will tend to be a saver. And you can tell that early on in their childhood. And obviously not that people can’t shift because they do, but it is common that opposites attract in this space. So we have that arena, and then we also have, once you get into the investment side of things, it’s very common that one spouse is very willing to be more risky in their investing, investing world with their investments than the other spouse. So you’ve got both issues going on, and there are some really easy habitual things to solve this problem. One of the first is, and a lot of couples do this, to have a household account. So let’s pretend both people are working and the house bills need to be paid, and so they both contribute to a household account, and that account doesn’t get touched for anything else. You know, maybe they contribute based on their incomes, or maybe they just split it however they want,

[02:00] 50/50 or, you know, 70/30. It really doesn’t matter, but get that household bill account funded every month, ideally ahead of the month, so that those bills can get paid, ’cause that drives more peace of mind than almost anything else. Secondly, of course, would be that emergency fund. Same deal. Pick a number, right? And so it needs to be the higher number. So if spouse A is okay with 50 grand, but spouse B wants 100 grand, well, then the emergency fund needs to be 100 grand. And frankly, we don’t do anything until that’s funded. And so okay, noted. Once those two things are handled Then there’s really a lot of room for separateness. And if people truly need to, let’s say they are very different in their investment realm, if they truly need to separate out money for investments, then they should do that. And again, maybe they do it as a percentage based on their income, or maybe they just 50/50 everything. Obviously, for a lot of people,

[03:00] he’s got a 401(k) and she’s got a 401(k), so fine. You can each pick your own allocations if you want. And it’s just one of those spaces where there’s probably going to need to be some agree to disagree, and there’s the base level where we agreed to agree. And so, like I said, the bills, the emergency money, and then of course my favorite next step is the opportunity money. Same thing. There can be a dollar figure set that they both agree on, and those opportunities then are ready to be taken advantage of because there’s opportunity money to do so. So those are just some strategies for this. Did I answer your question though? Spencer Shaw: You did. You know, it’s kinda strange in a roundabout way. I think you just did, like, 80% of marriage therapy right there. Like, legit, you, I think you did solve about 80% of the problems by laying out some of

[04:00] those first solutions. And for listeners not hype, but go back and listen to that. Th- that, that advice if I can summarize super quick, which is you know, being clear together on what the household we’ll call it, the necessary expenses are, like utilities, mortgage, et cetera. Taking care of that in, in an account that has no emotion. That’s huge. The emergency fund and picking the higher of the two numbers, that’s huge because it respects both parties, solves the problem. Once it’s solved, then it’s not a problem. And then the next is figuring out the other pieces. So let’s talk about the other pieces, because that’s where things, we’ll call it I think that will solve 80% of the problems. That’s my assumption. The last 20% is when one spouse says, “I wanna be very aggressive with this,” and the other one is a little bit more reluctant, or they’re s- maybe

[05:00] it’s an education. Maybe it’s not necessarily that they are aggressive or aren’t aggressive, they just might not have the knowledge. So how do we, and this is the key, bring the spouse up to understanding without fighting? Kim Butler: That’s a great question. And my favorite thing to ask at this stage of the game is how do you learn? So you said it very well. Investing is often not risk versus not risk, it’s education versus not education, and ex- possibly experience versus not experience. And so there are a bunch of different ways that this can l- get looked at. One of them that I find most common in clients in all 50 states is you sometimes just have to divide and conquer. Like, there’s so much going on in life that it takes two adults to run a house. And so sometimes the one adult has to handle the investments, for example, and the other adult’s handling other

[06:00] things. Okay, fine. Noted. And yet at the same time, I believe that your personal finances is the second job that you have. Like, you have your earned income job or maybe your service job, right? If you are a stay-at-home person. But then paying attention to your finances and at least having a little bit of education is critical because we all have heard of too many stories where the spouse, and unfortunately it is often the female, not always gets completely blindsided by something, either all of their assets are lost or there’s a huge IRS lien or something like that where they just had absolutely no clue what was going on, and furthermore, they don’t know what to do about it or who to turn to or anything. So going back to that how do you learn best, I really encourage spouses to at least hit the top layer of some learning. Figure out how you learn best. Do you like to read? Do you like to watch? Do you like to listen? And then

[07:00] rely on the provider of the education to the other spouse to provide you that top layer of learning based on your learning modality. I mean, that’s an obligation that any provider should be able to step up to the plate with. And then do a little bit of learning and have some conversation. You know, turn your brain on and get in there at least at a surface level so that you have some idea of what’s going on. And then two, for the spouse that is the experienced person, the educated person, the one that is interested in this arena, you too have an opportunity and a obligation to help get that education done, help open that door, introduce that person, take a little bit of time to get things explained at an elementary level, to show some paperwork or an online account or that type of thing. And then I also feel very strongly, just because I’ve seen so much money lost

[08:00] over my career, so many investments that didn’t work out, so many dollars down the drain that were for sure deals, it’s just very important that the more aggressive/educated investor of the two put some money in the safe, boring, guaranteed it’s gonna be there account for that safe, boring thought person so that they can sleep at night and have the peace of mind that’s required to live life appropriately Spencer Shaw: So when we’re putting together this system and you’re talking about getting both spouses on the same page and it’s not a a battle of who knows more, who knows less, who’s more experienced, who’s less, least experienced. There’s a, a cadence that I imagine. Do you what have you found work? Is it like first Sunday of the month, we take a few minutes and we cover this? And is it a, a high

[09:00] level overview? What does that look like that you’ve seen work for families? Kim Butler: Well, I have a great suggestion, and it’s what I was subjected to growing up. It’s what I did with my own children, who are now adults, and I think rock stars in the financial world, and I recommend it to families all the time, and it is to have a family meeting. And frankly, the family meeting should really be had with the children as young as you can possibly start them. And so obviously not everything needs to be shared at the family meeting, and maybe there’s a second family meeting that’s just the spouses so that everything can be shared, but that’s the cadence. And once a month is perfectly acceptable. I think for the kids, just to keep it a little bit more current, once a week is probably better. I know for my family, we– when I was growing up, we did it every Saturday morning. And I know when we went to a shower where my future daughter-in-law was being engaged, I’ve shared this story before, 30 people in the

[10:00] room it came up, “What’s a family meeting? Do you guys do family meetings?” Kind of a question to the crowd. Nobody raised their hand. I raised my hand. I thought it was totally normal. Apparently not. And so believe me, I’ve failed at many family meetings, and yet they’re critical. I can’t imagine running a household without a purposeful meeting once a month, or like I said, for the younger children, or when it gets critical time and your kids are in high school and you’re making sure that they have all their adult skills that they need. There is nothing more valuable than a family meeting. And so good heavens, you don’t need to have an agenda. It doesn’t need to be fancy. Stumble through it. Remember that you have two ears and one mouth. In other words, listen more than you talk and make those family meetings happen. They’re, I think, the most important thing, the most valuable thing that a family can do. And make the family meeting around money. It’s gonna be around calendar control

[11:00] a little bit too, ’cause that’s just necessary in life. But make it about money, and don’t be afraid to talk about it. And holy cow, if you want some help with this, please reach out because I have endless resources around this space Spencer Shaw: Oh, I love it. Final question. It’s not a finance question, but the end of your family meeting on a Saturday, was there ice cream included or not? Kim Butler: It was the Hayes family. Of course there was ice cream. Spencer Shaw: Okay. So listeners, do something cool with your family meeting as well. Anchoring in a, a little something isn’t bad. Our family at the end of our family meeting, we put our hands in the middle, and then we all put our hands here, and then we go, “Sha,” and we say our name. You know what? It’s dorky, but dorky is some kind… Sometimes it’s the cool things like that. Kim, thank you for sharing this. Some serious wisdom and almost like, marriage counseling on that first part. For all of our listeners, this may be one you

[12:00] wanna go back to