How to get client couples aligned on money

In his work as a financial planner, Lawrence Pon said he often feels like an unlicensed marriage counselor or couples therapist.

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Pon, founder of Pon & Associates in Redwood City, California, said that on more than one occasion, he was the first person a client told that they were getting divorced.

“If you are asking for success stories of financial harmony, I have none,” he said. “Only the opposite.”

When he encounters client couples with major money conflicts, he said he refers them to professional financial therapists —  “but that only works if they want to resolve their issues,” he said.

Advisors who work with client couples who are getting married say having important financial discussions first can help stave off major misunderstandings — and planning problems — after the vows.

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Prenups are an option, but they’re not for everyone

Some couples may want to consider a prenuptial agreement before taking the plunge.

Audrey Emerson, founder of financial planning firm Cents of Joy in Bellingham, Washington, said the process of drafting a prenup is the ultimate exercise in financial transparency.

“It forces couples to discuss difficult questions at a, hopefully, collaborative and loving stage of their relationship,” she said. “It’s much easier to decide how you’ll support each other through a job loss or becoming a caregiver, while you’re on the same team, rather than waiting for a crisis to find out you’re on different pages.”

This approach might not be a good fit for every client couple, said Emerson. However, the insights sparked by these planning conversations are always helpful, she said.

“My advice for couples would be to at least have some of these important money conversations before you tie the knot, even if you ultimately decide that a prenup is not for you,” she said.

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Having ‘a say and a steak’

Short of drafting a formalized prenup, advisors have plenty of opportunities to help client couples get on the same page financially before marriage.

A little creativity doesn’t hurt, either.

Benjamin Simerly, founder of Lakehouse Family Wealth in Cleveland, said pre-marriage financial planning meetings are some of his favorites. His firm also schedules another special meeting for couples to actively work out how to manage their finances as a team.

Simerly said his firm calls that meeting, often arranged to be held during a nice meal, “a say and a steak.”

“The play on terms with ‘steak’ being deliberate, even though we mean stake,” he said. “The goal is to help make sure the members of the household can have a voice and a vote — and eat some fun things too, not just boiled chicken and rice.”

Once the couple has established how to practice the basics of financial communication, Simerly said he then helps them start to put foundational pieces in place, like joint bank accounts and budgets.

“How we build those items depends on each couple,” he said.

Financial literacy is a crucial building block

Two common areas of disagreement among couples typically emerge during these pre-marriage meetings, Simerly said:  level of risk tolerance, and how much to spend.

“One spouse always wants to spend more, and one wants less,” he said. “Often, one spouse wants to spend more than the household has to spend in the first place.”

Lack of financial literacy can greatly impact couples’ communication. Simerly said it has become normal with his client couples under age 50 that he has to educate one spouse as to how credit and debt work and “why there is no infinite money tree.”

“It’s unfortunately the new reality,” he said.

Insisting on open conversations about budget, spending and joint accounts is standard at his practice.

“If you can’t work through learning how to communicate about money before a marriage, then it’s not the time to get married,” he said.