Marriage and Investing: Not Always Happily Ever After

Every married couple has its differences, but few subjects have the potential to pit spouses against one another the way money does. In fact, a recent poll by Money magazine found that 70% of married couples say they argue about money, placing it ahead of chores and even sex among household hot-button issues. While many couples fight about spending habits, disagreements about saving for retirement and investing in general are common as well.

Last week, we asked Morningstar readers on our Personal Finance discussion board how they deal with investing differences between their spouses and themselves. (You'll find the full conversation here.) Given that the discussion took place on a website geared toward individual investors, it's not surprising that many readers said they are more engaged in investing than their partners are. However, that wasn't always the case.

'A Matter of Constructive Dialogue'
For some readers, investing as a couple is a collaborative, if not always entirely harmonious, process. Maryhada spoke about differences she has with her spouse, saying, "My husband is a conservative accountant and invests in investment-grade bonds, blue-chip U.S. stock funds, and Treasuries. I invest in emerging market-stock and -bond funds, high-yield bonds, technology, and small-cap stock funds. We achieve a balanced portfolio ... together ... and have done quite well the last 30 years."

"We each have IRAs that we manage independently," wrote DrBobb. "For other investments we talk. The emphasis is on facts and logic. Morningstar is a great source of reliable facts."

Among those working with their spouses on investing but managing some assets separately was retiredgary.

"We are both investors more than traders and both interested in diversification. So we don't have basic differences," retiredgary wrote. "We usually agree, but when we don't she makes the final decisions on her retirement accounts and I make the final decisions on mine. When we disagree on an opportunity in our joint taxable accounts we just do nothing and wait for the next train."

Several readers mentioned the importance of independent financial advice in helping them and their partners make decisions.

"Once each of us achieved a level of financial literacy, then our differences in risk tolerance became simply a matter of constructive dialogue over various investment decisions like asset allocation; specific fund, stock and bond purchases; and alternative investments," said vandy73. "The availability of unbiased investment information over the past four decades helped greatly. We consider ourselves partners in all decisions."

Differences in risk tolerance were common among readers and their partners, but some were able to make it work.

Inspectorgadget wrote, "I manage the investments and tend to be the more aggressive risk-taker; my wife is more conservative and helps me keep things more balanced.  However, it doesn't always fit that pattern. Sometimes she will agree that it's time to be aggressive (e.g. late 2008 to early 2009). The dialogue is usually more important than the initial thinking."

'She Doesn't Ask, I Don't Tell'
Even for those who don't always see eye-to-eye when it comes to investing, agreeing to disagree can help keep things running smoothly.

"My wife is more concerned about ethical investing. I'm more of an index investor," said chumblespuzz. "She doesn't know or care that much about investments. I have steered her retirement moneys toward highly rated, top-performing funds like  Parnassus Core Equity (PRBLX). I follow a balanced approach with funds that may be less 'ethical' but are highly rated medalist funds from Morningstar. She doesn't ask, I don't tell."

Cgajowkski had a different take on the subject, writing, "My significant other and I have maintained separate accounts and planning for years. We both have an interest in investing and invested for retirement. I'm more the researcher; he has bought stocks on tips that I think are as useful as a racing sheet. He'd sometimes talk about a friend of his who reported amazing gains--I'd be the wet blanket suggesting that this could not be the whole story. ... We'd probably kill each other if we had to make a lot of joint decisions. Even when we agree overall, there's a little control thing going on."

While not all readers expressed interest in talking investing ideas over with their spouses, JohnGalt87 said he finds it helpful. "When I see a need to buy or sell a particular investment, I discuss my plan with my wife before initiating the transaction," he said. "I discuss what reasons I have for the desired action and what I expect the results to be. She may request further explanation, if she doesn't 'get' what I'm trying to accomplish. This conversation often serves to focus my thinking, usually allowing me to avoid making an emotional rather than rational decision."

Several readers said they or their spouses are in charge of specific financial responsibilities, with one or the other taking the lead on investing, budgeting, or other money matters.

Cybchris wrote, "We both are fully engaged in our investments, although with differences. Since we are self-employed, I do the business bookkeeping and figure out our cash flow to decide how much we can funnel to the 401(k) account that month. We both agree how to invest that money and we sit down once a year and look at our asset allocation. New money might go towards sectors that we are underweighted in. He takes care of buying/selling in the taxable account though, while I keep tabs on our reserve/emergency fund. I've taken the lead in 'planning' our retirement (doing the calculators, getting our Social Security estimates, and creating spreadsheets, etc.). I also have taken more of an interest in how to reduce our tax bill by saving more tax-deferred and reading blogs and books to learn useful info."

'My Wife Is Utterly Bored by Investing'
But for every reader who reported working with his or her spouse or significant other on investing decisions, there were others who said their partner just wasn't interested. It bears repeating that comments were made on a website dedicated to helping individual investors, but the degree to which many posters described their spouse's disinterest in the subject was striking.

Comments made by molokoeo were typical. "My wife has absolutely no interest in investing whatsoever," he wrote. "If Warren Buffett came to dinner, she'd talk about the grandchildren. She has met our financial advisor and knows who to call if I get hit by an errant golf ball. I'd truly love to have an investing partner, but it's not to be." 

"My wife is utterly bored by investing," wrote GregLee. "I do periodically outline for her any changes in our portfolio of significance, and she's polite enough to listen, but it just goes in one ear and out the other."

And it wasn't only wives who had no interest in investing, as Dolosvend pointed out.

"It is interesting to see so many remarks starting with 'my wife,'" she wrote. "Therefore I will begin with 'My husband has no interest in investing and is happy to hand that job over to me.' I really enjoy keeping track of our portfolios and since I am a do-it-yourself person I want to thank Morningstar for all your great information over the past 20-plus years."

Dragonpat also shared her story about going it alone when it comes to investing. "I mostly do not engage my husband in debate on investing," she wrote. "I invest on my own without input from him. My husband and I have very different investing styles. I actually would call what my husband does 'hoarding' rather than investing because he is so risk-averse. We have been married a long time (1975) and the 401(k) did not exist when we married. We both qualify for pensions at the S&P 500 company that we work for and that has decreased some of the tension. It was not until the early 1990s when I got promoted and there was extra income to invest that we had disagreements about investing. He wanted to just keep on filling up the bank savings accounts and CDs and was not even contributing to his 401(k) at all. After some big 'fights' about it, I decided to just not buy in to his investing mode anymore.  ...  It was not until 2009-10 that I finally convinced him to contribute enough to his 401(k) to get the whole company match."

Yet another frustrated reader was lionsgate, who wrote, "My wife was not a saver when we married. I convinced her to save and invest and together we have done well. However she will not learn about what we have, where it's held, how to access it, and what to do if I should die suddenly. She handles the day-to-day household finances but I can't interest her in our investment management. Maybe that's OK because I have a free hand and there are no debates to bog us down with indecision. I enjoy the work of portfolio management, she doesn't. But I hope she [doesn't] become complacent. I often remind her of market risks. What's here today could be gone tomorrow."

Peter5 had a similar story to tell. "My wife has no interest in our investments other than asking occasionally whether we'll be fine for retiring early," he wrote. "I've managed our assets in primarily active funds and individual stocks the past 20 years. Thanks to good fortune we're doing just fine. My instructions to her if I get hit by a snowplow are to invest in balanced index funds with Vanguard."

Getting Financial Affairs in Order
While many readers lamented being married to a spouse who is disinterested in investing, some focused on the importance of making sure their husband or wife knows how to manage their money in case they no longer can.

"My wife is also not really interested in investing," said win1177. "Her eyes start glazing over real quick if I show her a spreadsheet of our asset allocation, etc. She has been a great mother, 'shopper' for our household, and an incredible wife, so I am blessed! I realize that now after 31 years of marriage. ... Traditionally, I have bought stocks, but am slowly transitioning over to mutual funds (almost all at Vanguard) so that she (or my adult daughter) could take over if/when I can no longer manage it."

For jr99, bringing in a professional is part of the succession plan. He wrote, "My wife has no interest in investing. She retired two years prior to me. I helped her find an advisor she was comfortable with. I manage my own investments. I most likely will depart first, so she will have a trusted advisor to help her through that transition. I monitor her investments as well as mine to keep the advisor honest."

Other readers shared more specifics about steps they are taking to ensure that their less investing-savvy spouses know what to do if they become incapacitated.

"For the past 28 years it has been my responsibility to run the personal finance component of the household," artsdoc said. "This has been fine, although as I've aged, it's become apparent to me that we have to have at least annual meetings to discuss what we have, how it's invested, where it's invested, review disability and life insurance, and review the trusts. This actually works out well. We also both have LastPass, the password keeper. I had been concerned that if anything were to happen to me, all of those crazy passwords would prevent access of accounts when needed most. No longer. Everything is in the password keeper so (I'm hoping) things should go smoothly if I'm unable to take care of finances."

Artsdoc and others also mentioned writing an Investment Policy Statement, a document detailing their investing goals and processes and making it available to loved ones. (Christine Benz, Morningstar's director of personal finance, walks you through the steps to writing such a statement in this article and you'll find a template to get you started here.)

"Like many of the earlier postings, we are a split household where only one of us has an interest in the investing process," said Tomas47. "My only expectation is that she at least understands what we are doing from a 20,000-feet perspective. I have used an Investment Policy Statement to achieve that end. It includes: purpose and background, statement of objectives, risk tolerance, asset class preferences, time horizon, necessary rate of return, a section on selection of money managers in case I die first and she/our daughter have to take over and want a money manager, control procedures, allocation and rebalancing table, and a tactical considerations table focused mostly on where assets should reside--taxable account or IRA and why."

Despite resignation among many readers when it comes to getting their spouses to take an interest in investing, there were occasional glimpses of hope. Some readers shared stories of improvement, even later in life.

"My wife and I have no major differences about investing, since I handle it!" said Juris2. "She was a stay-at-home mom who devoted her 'extra' time to community/neighborhood leadership. She had plenty to do without also managing investments (which until recent years mainly involved my 403(b) at work); she also handles household finances. ... As we moved toward retirement (which happened two months ago), she became actively engaged along with me in consultations with financial and estate planning advisors. She needs to feel confident about what's happening with all of our investments if and when she has to take them over from me!"

Then there was hondo, who wrote, "There are no differences between my wife and I. She leaves everything concerning investments up to me. I used to worry about her disinterest, but have learned that she knows more about what we have than I thought. She leaves the decisions up to me, but asks questions and keeps informed about what we have. I am proud of her. I now know that if I go first, she will not panic, but just maintain our balanced fund portfolio, draw her required minimum distributions, and live out her life in a worry free way."

Comments have been edited for brevity and clarity.