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Sometimes It’s Better to Divide and Conquer

March 24, 2017

This time we hear from Matthew Carbray, certified financial planner and managing partner of Avon, Conn.-based Ridgeline Financial Partners and Carbray Staunton Financial Partners. He describes a method he’s found can help spouses get on the same page when it comes to planning their financial futures.

In my early days as a financial planner, I often assumed spouses operated as a cohesive unit. However, I soon learned that in practice that’s often not the case. Sometimes the disparate views between spouses were a surprise to them, as if they had never talked about certain issues before. Other times the spouse who had earned less over time would feel like he or she had to defer to the higher-earning spouse and might feel resentful. In the end, what should have been a positive experience discussing their hopes and dreams would sometimes turn contentious.

Recently I walked into a meeting with a couple thinking that I knew these people well since I had worked with them for years. They had been pretty frugal throughout their professional years and I assumed those traits would carry over as we looked harder at their retirement years.

However, when we got down to talking about their future and they realized they had some “extra” money, they diverged on what to do with that income. One spouse wanted to spend as much as possible, while the other wanted to leave a charitable legacy.

This difference of opinions surprised them — and me. I sensed their disagreement was about to derail the meeting, so I decided to call a timeout. I wanted to try out an exercise to see if we could clarify their points of disagreement. I asked them to take some time with a set of about 20 index cards, each of which included a simple statement, for example: I want to reduce income tax exposure; I want to give to charities; I’m concerned about estate taxes; I’m nervous about the stock market.

I separated the couple and asked them to rank the statements on the index cards in order of their concern, from most concerned to least. After they completed their rankings I brought them together and had them reveal their lists to each other. I also asked them to explain why certain statements took precedence over others. Each spouse had a turn, during which the other spouse listened without comment. This turned out to be a great way to start a healthy conversation.

Matthew Carbray

At first the couple was surprised by the fact that their lists looked different. But when we dug in a bit deeper they realized they were more closely aligned than they realized. The exercise also prompted a lively discussion. The spouse who wanted to give more to charity sparked an interest in the other, and they spent the next few months eagerly planning how to leave a legacy while still retaining enough income to enjoy their retirement years.

Since that successful experiment we’ve been using these cards at our firm for some time – and they are really quite effective. I’ve come to realize that separating the couple is important because it lets spouses who otherwise might feel constrained have a say in the matter. Also, it’s often the case that even the savviest spouses have not considered all the factors that come into play when planning their financial future, so putting those statements in front of them challenges them to consider all the issues at hand.

The simple task of making a list forces people to think clearly about what they want to do with their money — and their time. It also forces each spouse to seriously consider the views of the other. As financial planners, we are always aware that we need to carefully listen to our clients. The same often holds true for spouses: they need to listen to each other.

This exercise is eye-opening for many couples, even though it isn’t anything revolutionary. All we’re doing is writing phrases on cards and asking people to rank them. But it never ceases to amaze me how effective it is and how it ultimately helps us prepare a better plan — for everyone.