Financial Literacy and Your Marriage

Making sure that you know what is going on with your money and where it is, is not just a good thing to do, it is perhaps the most important thing you do. Being financially literate means that you do not have to just trust and hope for the best. If you want to be able to make sound financial decisions as a couple, then you have to know what you are talking about, or it will just be a mountain of data that makes no sense and scares you.

In a recent couples’ retirement study, the top two pieces of advice for newlyweds was:

• Save as early as possible for retirement
• Make all financial decisions together

Saving as early as possible for retirement is sound advice, but how do you know where to put your money, and what the best plans or investments are?

Nearly two-thirds of Americans are not able to pass a basic financial literacy test. This means that an enormous portion of the population are in the dark concerning their affairs and are not able to adequately plan for the future. The fact that so many are not financially literate will also have an effect on relationships, as it is not possible to make joint decisions if one of the partners is not on the same education level when it comes to figures and investments.

Something has to change as there seem to be glaringly obvious problems surrounding financial literacy. For couples to be able to live together in harmony and be able to plan productively towards their shared future, they require an understanding of the basics. It is rather worrying then that the statistics consistently show that in the U.S. and Europe, women are significantly less likely to answer financial literacy questions correctly than men.

If you do happen to know more about finances than your spouse, perhaps it is a good idea to make sure your partner has at the very least a working understanding of your shared finances. This way you will be able to save as early as possible for retirement, and make all your financial decisions together.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

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Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC