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Marriage and Money: What to Do When You and Your Spouse Have Different Risk Tolerances

By Erik Folgate

My wife and I are a perfect example of spouses with VERY different tolerances for risk. I am definitely more of a risk taker when it comes to investing money and Lindzee is definitely more conservative when it comes to money. I like the idea of flipping a house to make a quick profit, while she would rather put her money in a money-market account. However, Lindzee does not try to act like she knows more about investing and what levels of risk to take with our money. In most cases, we balance each other out. She helps prevent me from doing deals that will bankrupt us, while I help prevent her from allowing our money to rot from inflation and taxes. But, some of you might be in a situation where your spouse is stubborn about how to invest your money. Particularly, you might both have 401(k) or Roth IRA accounts for retirement. Just because the account is “your” account that takes money from “your” paycheck, it’s still both of your money. Which means that you should both be making decisions about that money together.

Get on the same page with your investment strategy. Obviously, this requires communication. Identify your risk tolerances. You can do this by evaluating who likes to take more risks everyday activities. One of you will be more calculated when it comes to making decisions than the other. Figure that out, and then talk about how you are going to come together to make a decision about your investments. You can’t have one of you investing in growth stock mutual funds and real estate and the other investing in government bonds. It just doesn’t make sense. Besides, it’s OUR money, not yours and mine.

Pick your retirement account investments together. If you are under 40 years old, there is no reason why you should not be aggressively investing your money. You have 25 to 35 years for that money to ride out the waves of the economy and stock market. Stop listening to the media and your weird uncle that the stock market is a bad investment. All you need to do is look at its track record which has returned 12% for the past 80 years. Again, if you are both similar in age, you should BOTH be aggressively investing. It makes no sense for one of you to have growth stock mutual funds and the other to have money market accounts.

If your partner will not take your advice about their investments, seek marital counseling. Don’t walk into the marriage counselor’s office saying you have a disagreement about 401(k) contributions, but that’s not the problem. If you can’t sit down together and have a rational conversation about how you both should be investing your retirement accounts, then there must be another issue. Maybe there are communication barriers, trust issues, or something else that is hindering your spouse from getting on the same page as you. Marital counseling doesn’t mean that your marriage is failing, it just means your human, and you need some help.

I’m going to continue to preach the idea of making decisions and managing your money TOGETHER as one cohesive unit, because that is the way I think marriage was intended to be. It was intended for you to be a team, for two people to become one person. If you can’t share your money together, you can’t share your life together.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • Jacquelyn Hart-McCoy

    I agree with you and think its great you and Lindzee do this, however in my case it is really hard because Shawn has absolutely NO interest in investing at all. He always says, I have no idea do what you want. I wish I knew how to get him to want to learn about it. I mean, its OUR future we are talking about.

  • author

    Yeah, well, it’s one thing if he’s being defiant about investing your money at all. If he’s saying, “i really dont know what to do, so i trust what you do with it”, that’s different. Understandably, you still want to share it with him and make it feel like you are both making the decision.

    I would sit down with him and say, “hey, I know that you think this stuff is boring as hell, but at least try to learn about what we are investing in”. Shawn’s a reasonable guy, so I think he’ll do it if you genuinely show him that you want him to be involved, evne if you’re making most of the decisions.

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