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Make financial planning a team effort

Financial planning with your partner can help ensure alignment and confidence along the way.

September 19, 2019 | Sarah Hind

Like many couples, my husband and I take a "divide and conquer" approach to managing our home and family. We both maintain full-time professional careers, and our daughter has a busy sports and academic schedule, so we need to be efficient to get everything accomplished. Our overflowing agendas leave little "down time" to discuss our respective to-do lists, so we trust each other to have our own items covered.

My husband's duties are primarily visible—taking out the recycling, mowing the lawn, and maintaining the fish tank. And while many of my tasks are easily observable, I'm also responsible for the more obscure task of managing our family finances.

Stumbling upon a problem

Once a quarter, I update an Excel file that comprises our balance sheet—one page for assets, and another for liabilities. Recently, my husband sat down at our computer where I had left open our liabilities page. Seeing just one part of a much larger puzzle, he immediately started asking me all kinds of questions. And, feeling that he was challenging some of my decisions, I got defensive. After all, I'm a trained professional in the financial industry. I wondered to myself, "Why can't he just trust me?"

That's when it hit me. In my efforts to shoulder this responsibility for our family, I'd left him out of the process of influencing, managing, and understanding our family's finances. Instead of bringing him along as a trusted partner, I'd made him a silent observer. And if I hadn't been there to answer all those questions, he'd have gotten quite a distorted picture of our progress toward our financial goals.

What happened to our well-oiled machine?

While on the surface, dividing household and family management duties makes sense, we learned that financial planning is one area where both partners need to be involved. Why? Here are just a few key reasons:

  • Handling emergencies. Sharing responsibility ensures that if something unexpected happens, either partner can act on behalf of the family's finances
  • Dealing with financial providers. To participate effectively, both partners need to know and be comfortable working with the family's financial service professionals.
  • Pursuing shared goals. Perhaps most important, working together on your finances ensures that you're on the same page about your long-term financial goals and the plan to reach them.

One size doesn't fit all

This doesn't mean, however, that both partners need to be in the weeds with every detail of the plan. If one partner is more financially savvy with investments or knows more about estate planning, it might make sense for that person to take charge of those things. However, it's important to sit down together at least a few times a year to review your overall plan.

When my husband and I decided to team up on this, we began by answering these questions together:

  • Do we have an easily accessible, up-to-date list of all our financial providers?
  • Do we each have access to, and any necessary authorization to act on, individual accounts?
  • Do we need to update our plan because of life changes such as marriages, adoptions, births, or other major events?
  • Have we reviewed the beneficiaries on all our accounts to ensure they're up-to-date and accurate, and reflect both of our wishes?
  • Do we each know who to call, and in what order, in the event something unexpected should occur such as a medical emergency?

While these can be emotionally charged subjects to discuss, they're all critically important. When each partner has a sound understanding of the financial plan and any contingencies, both benefit from peace of mind.

Creating a new approach for your family

Changing the way you manage something as important as finances can seem overwhelming. But remember, you don't have to figure everything out all at once. As with most things in life, it's best to simply approach this one step at a time. As you get started, try dividing your discussions into a few short meetings, and focus on reviewing specific items. And use the Vanguard tool below to create helpful records for future reference.

Also, schedule an appointment with your Vanguard relationship team (and any other providers) to ensure that both of you are comfortable and on the same page.

It may take a bit of time and energy to get your joint efforts on the right track, but the payoff will be worth it. Spending time together now to walk through your financial plan can help you face the future more confidently and avoid challenges down the road.

Looking ahead together

Thanks to my husband's unexpected review of our balance sheet, we've spent the last few weeks talking in detail about our high-level wealth plan and how our "bottom line" should evolve as we prepare for certain life events—sending our daughter to college, downsizing our lifestyles, and retiring. We're also mapping out a contingency plan to ensure each of us is prepared to respond if something unexpected occurs. As a result, we both feel more at ease with our financial plan, and that's allowing us to enjoy the most important things in life, such as our family and friends, even more.

Remember that Vanguard can help

If you find yourself in a similar situation and aren't sure what to do, Vanguard can help. Contact your Vanguard relationship team or Vanguard Personal Advisor Services® today. We'll be happy to partner with you and your family on this journey.

Notes:

All investing is subject to risk, including the possible loss of the money you invest.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.


Sarah Hind

Sarah is a senior manager with Vanguard Personal Advisor Services® and leads the advice teams serving Vanguard Flagship Select Services®. Her teams are responsible for integrating tax-efficient portfolio management with intergenerational wealth planning and charitable giving for Flagship Select clients.

Throughout her 15-year financial services career, Sarah has specialized in advice. Prior to her leadership roles at Vanguard, she spent the first half of her career as an advice practitioner, building a professional track record focused on putting client needs first.

Sarah earned a bachelor's degree from Virginia Polytechnic Institute and State University (Virginia Tech) and an M.B.A. from Drexel University's LeBow College of Business.


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