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 Although they have been married for 18 years, with two kids, her
hubby missed the mark by $8,000.
"He should have known, because I told him once," laughs 43-year-old
Kristi. "But I'm not sure that men always listen."
And that's in a power marriage comprised of a certified financial
planner and a management consultant. Imagine how clueless the rest
of us are about our partners' finances.
Boston-based money managers Fidelity Investments asked that very
question in its just-released 2015 Couples Retirement Study. It
found that an amazing 43 percent of people could not say what their
partner earns.
Most couples claim to communicate about money exceptionally well,
notes John Sweeney, Fidelity's executive vice president of
retirement & investing strategies.
"Despite that, 10 percent of people guessed (the salary of their
significant other) wrong by $25,000 or more," Sweeney says.
Before we scoff at clueless partners, though, think about the nature
of the modern economy. Within a few years, an estimated 40 percent
of the workforce will be comprised of contractors, freelancers or
temp workers, according to a study by software company Intuit Inc.
And as any freelancer knows, income can be wildly different from one
month to the next - just as it is for Kristi Sullivan, a fee-only
planner who does not know her annual earnings "until December 31."
"Our grandparents worked at a company for 40 years and brought home
steady paychecks," says Sweeney. Today's economy is project-based,
"which makes predicting income extremely hard," he notes.
Partners may be guessing off-the-mark for legitimate reasons, but
couples are not where they need to be, either in understanding their
finances, or each other. The reason often comes down to deep-seated
emotions, experts say.
"A lot of it is about fear," says Elle Martinez, the Raleigh,
N.C.-based founder of CoupleMoney.com and host of the Couple Money
podcast on iTunes. "Maybe you are embarrassed about your salary, or
maybe you have debts."
How can people get more comfortable with sharing numbers with their
significant others?
JOINING FORCES
Step one is basic transparency. Have at least one joint account to
handle everyday expenses and monthly bills, for example. And going
over the joint tax return before April 15 will provide the headline
numbers of what each partner is bringing in.
To get a real money conversation started, one clever strategy is
very Zen. If you want to know about wages, don't come right out and
ask. Instead, go at the issue indirectly.
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"I know it sounds counterintuitive, but talk about your goals
instead," says Martinez. "Something simple, like wanting to go on
vacation next year."
Then you can get into where you are right now financially, and how
you can achieve that goal together, Martinez says.
"It's an easy way to get a discussion started, without directly
asking how much money they make," she adds.
Interpersonal habits can be hard to break, though, especially when
you've been in a relationship for many years. In those cases,
consider drafting a third party to broach issues you're not
comfortable bringing up on your own.
Your financial planner or accountant, for instance, can give both of
you financial updates that can fill in any blanks. After all, both
partners deserve to know where things stand financially, even if one
of you tends to handle the bills or the investments.
If you don't have such a support team in place, here's another
simple option: Take Fidelity's nine-question Couples Quiz (https://communications.fidelity.com/couplesquiz).
A sample question: "Your favorite store is having a blowout sale.
What will you do?"
"It's a great icebreaker," says Sweeney. "Often after they take the
quiz, we get partners saying to each other: 'I never knew you felt
this way.'"
Above all, don't assume. It's natural to make assumptions about how
much money someone makes, based on how they tend to spend.
That, however, doesn't mean a lot. When Elle Martinez and her
husband finally had a big money conversation, each of them got a
bombshell. She had fairly large debts, and he wasn't earning nearly
what she was.
"Without having that money talk, we would have kept on making
assumptions," she remembers. "It was an eye-opening experience."
(Editing by Lauren Young, Beth Pinsker and Andre Grenon)
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