Creating Wealth is an in-depth conversation between Bill Taber, an experienced financial advisor, and his millennial daughter about personal finance, investing, and financial planning.
Bill Taber is President of TABER Asset Management, a Registered Investment Advisor (RIA) and fiduciary firm located in Des Moines, Iowa since 1998. For decades, Bill has provided investment management services to clients, creating wealth, building wealth, growing income, and preserving capital for each and every client. TABER offers personalized asset management, wealth management, retirement planning, financial planning, and services such as 401(k) rollovers.
His daughter, Anastasia, works in accounting at a global law firm in Washington D.C. She enjoys discussing finances and her cats’ latest antics with her dad.
Episode 7 - Discussing Finances with Your Life Partner: How do you approach a discussion of financial habits and goals with your life partner? Bill and Anastasia discuss the importance of being on the same financial page with your partner and what that might look like. What if one person is a saver and the other is a spender? Bill describes some of the obstacles he has seen couples face and his joy in being a father.
For questions and comments, you can email us at firstname.lastname@example.org.
Anastasia: Welcome to Creating Wealth, I’m Anastasia.
Bill: Hi, I’m Bill.
Disclaimer: The views expressed today are our own, solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investment strategy. The views are subject to change and are not intended as a forecast or guarantee of future results.
Anastasia: Today we’re going to talk about discussing finances with your life partner. This is a very interesting topic for us because I’ve just spent the last, the better part of the last thirteen years dating and my dad has been married for how many years? Forty?
Bill: Forty two.
Anastasia: Forty two years. (Laughs) So we have a very wide perspective when you’re dating, what it’s like when you’re in a very long-term committed relationship and tackling the financial topics, having a financial discussion with your life partner. This is obviously a very important conversation to have with someone that you’re looking to marry or otherwise be committed to, just because it is a number one factor in divorce. Having money issues can cause a lot of problems in a marriage. Having a different viewpoint on how you should spend money can cause problems. So we’re going to first start off with discussing how important it is that you are financially compatible with your partner? Like for example, one of you likes to spend money and the other prefers to save money. How should you navigate that as a couple? And Dad, I’ll turn the question over to you.
Bill: Sure, couples don’t have to be completely compatible and in fact, in most cases they’re not. But in a sense, one spouse tends to be more inclined by personal attributes to perhaps being detail-oriented, enough to do the budgeting and the tracking of expenses, and the other spouse tends to be less interested in or not interested at all in money or finances, they can be more free spirited about handling the money. So that couple’s dynamic can work really well as long as the detail-oriented spouse doesn’t seek to control the other’s behavior or make decisions for them, and the free-spirited spouse needs to respect the importance of budgeting, be open, and participate in the conversations.
Anastasia: Yeah, that makes a lot of sense. I would think it’s more common than not that one likes to spend money and the other likes to save money, right? Do you see that dynamic happen a lot?
Bill: It’s probably the most common relationship that I’ve seen. My personal situation is that as an investment person and my wife of forty-two years is an accountant means that we (laughs) are both detail-oriented about this. But I’ve also seen couples that neither of them were very responsible and that’s not a good situation to be in.
Anastasia: (Laughs) Oops. But that’s got to be a fair number of couples, right?
Bill: Yeah they have to learn pretty quickly otherwise they’re going to be in a deep hole. I mean debt gets created and they just can’t find any way out of it.
Anastasia: That’s like that one show that you guys used to watch a lot, what was it? Til Debt Do Us Part?
Bill: Til Debt Do Us Part. Yes, Gail Vaz-Oxlade. She is a Canadian woman and every week she would have young people on her show --some of them were couples and some of them were individuals--and they had no clue as to how to save money or how to stop their prolific spending. And so, we just watched that over and over and over until it became kind of part of us. That this is what you don’t do. (Laughs)
Anastasia: Right. It’s good to have shared goals, shared financial goals. Make sure you’re on the same page with what you should be saving for, what you should be spending your money on. I do have kind of a smaller question that I just thought of: Say that one person likes to spend more, is there like a dollar amount that couples decide on, maybe you can spend up to this dollar amount without consulting the other person, but for larger purchases you want to be on the same page?
Bill: Yes, I think that’s a very good question because what I’ve seen is that there is a certain dollar amount above which both people have to agree that this is what they want to do with the money. Below that figure, you give each other the flexibility of making the decision to spend it on their own. That kind of gets adjusted over time as you look at your budgeting and look at how you spent the money and making a decision of “Well I spent $60 on that,” Or “I spent $80 on that and it wasn’t really all that helpful to where we wanted to be financially.” And as people make more money generally that dollar amount goes up.
Anastasia: Yeah that makes a lot of sense. I feel like when I’m starting out that it was the smaller expenses that could really add up, if you didn’t watch them. Like going out to eat, if you do that a couple times a week, that can, or if you do delivery, the delivery charges can really add up to the point where you’re actually spending several hundred dollars a month just on ordering takeout.
Bill: Mhm. Convenience.
Anastasia: Right, and that kind of stuff can add up and eat into your long term savings.
Bill: Or your ability to meet a certain goal that’s really important to you for the long term.
Anastasia: Yeah, along those lines. The next question was when you’re looking for a life partner, how and when should you approach the topic of financial habits? (Laughs) Maybe not the first date is when I would have the conversation, “Well, how do you approach money and how do you approach budgeting?” But I would say it’s the kind of thing that you can tease out over time. You’re spending time with this person so you’re seeing how they’re spending their money. I dated someone who when we would go out to the bars with friends, he would cover rounds of drinks, and oh it seemed like a lot and it was adding up to be a lot. So that was kind of a first indicator to me is, “This person doesn’t really save their money or focus on longer term financial goals, for whatever reason.” And that’s something that you can see, that you can kind of tease out right in the beginning of dating someone. Obviously if you’re twenty years old and you’re not looking to date or to get married anytime soon (laughs) you might not have to have these financial conversations for a while. But you can look at their habits and see what it is that they’re prioritizing spending on.
Bill: Mhm. My perspective on it is--from real life experience--is that the Boomer generation, my generation, there really weren’t very many young people that were in love that spent a lot of time talking about money. It’s a highly personal, emotional topic. And most learn to deal with their money over a longer period of time after they were married for a while. And if there was a strong commitment to the relationship, over acting as separate individuals, then they worked things out over time. In today’s world, where there are a good number of people who have student loan debt and they bring that debt to the marriage, I think it’s very important to have these discussions earlier on. To the point that you’re making, it probably doesn’t happen in the first three to five to ten dates or whatever, but like you said, you’ll observe what people are doing and at some point you can have a conversation about it, it just needs to be matter-of-fact and not emotional.
Anastasia: Yeah, approaching from a non-judgmental standpoint is really important. As soon as you start judging someone for what they’re spending their money on, they tend to shut down, understandably.
Anastasia: But that’s an interesting point you make because I do think that millennials and Gen Z really cannot afford to wait as long as Boomers did after they were married to have these conversations just because of--we have a lot of different financial strains on us. I don’t know, marriage is a really intense bringing together of two individuals and all of their finances, so it’s just really important to be on the same page with what the person’s financial situation looks like, and how much credit card debt they may or may not have, is also important.
Bill: Yeah, because credit card debt didn’t really start to proliferate until probably the 1980s and then it grew in the 90s, and it’s continuing to grow. And the student loan issue, I mean that’s really become an issue since the year 2000 and beyond, and so this is something that your generation is having to deal with and by having open conversations about it at an appropriate time I think is a good way of handling it.
Anastasia: Yeah, absolutely. In terms of starting the conversation, I think what you suggested makes a lot of sense. If it can kind of come up organically or when you’re both in the mood to discuss something so personal like how you approach money. I mean it’s just as important as talking about whether you guys want to get married or whether you want to have children. I think talking about how you approach money is just as important as those conversations, so that’s just something--a serious conversation to have with your life partner--but it’s something that needs to happen definitely way before you get married, and just getting a sense of, “What’s this person going to be like inside of a marriage?”
Anastasia: Yeah, great. So the next question I had was when you are in a committed situation, how often should couples revisit their financial plan? Should it be every year or should it be during every milestone event like buying home or getting married, having a kid, having a second kid?
Bill: Well, whatever works for the couple, but I would suggest having the planning and budgeting done yearly, usually at the end of the old calendar year and beginning of the new calendar year. Just because a budget is done at one point in the year, doesn’t mean that it never gets reviewed or that it can’t be changed or modified. Certainly in 2020 already there’s been so many things that have happened that I’ve adjusted my budget several times. So reviewing your finances once you are in the budget process should probably be done monthly. And then as we’ve mentioned in previous podcasts it’s important to record expenses on a daily basis, so that you know those little things that you’re doing that can add up. The process of doing a budget yearly forces you to consider the need to save for longer term goals like buying a house or having babies or pre funding college education. And one important but sometimes overlooked area is the upkeep and maintenance of appliances, home repair, and replacement of cars. By considering that as an item in your budget, it is more likely that you could potentially avoid having to finance entirely your next car purchase or have to take on credit card debt to replace, say a stove or a microwave oven that goes out. So again, advance planning really pays off in terms of avoiding getting into financial difficulty.
Anastasia: Totally on board with that. Could you just talk briefly about your process in terms of how you come up with a budget?
Bill: Well this is something that for some people might be easier than for others, but I have a pretty good sense of what I want to have happen in my life. I actually envision ahead of time things that I’d like to have show up, whether they be milestones in the development of my business or travel or paying for college education, etc. It’s a visioning process and so my budget starts by thinking and visioning about all of the things that I would like to have happen and writing those down, and then going to my wife and having her write down what would she like to have show up in her life, what would she really like to see? And it’s a free-flowing exercise, it’s something that you just don’t put a filter on and say, “I can’t do that. I’m going to be limited. I can’t afford that.” So with that list, then that goes into the process of prioritizing, so you then look at your money and you say this is the revenues that I have, then you compare that against the list of what you’d like to do, and you put a price tag on some of those things, and then you add up all of those price tags. And every year, this is interesting, but every year the cost of doing all of those things, sometimes much greater, than the amount of money that I have (laughs).
Anastasia: (Laughs) Shocking.
Bill: “The ends don’t meet” I think is the term that you used. And that’s where it becomes a process of saying, “Okay what is the priority? If I can’t do this, but I could do this, is that thing that I can do something that we really want to do?” And in the process of having those conversations and that communication with your spouse, you’re able to say between the two of us this is something that both of us know we really want to have happen. Sometimes it involves some compromise, because one person really wants to do something and the other doesn’t, but in a marriage over a period of time, Sometimes you can just say, “Well I know that you really want to do that but we can put that off for another year or two and still get it done.” And you come to an agreement and feel quite good about it because you’ve had open communication about it. Does that make sense?
Anastasia: Yeah, that’s the communication is key aspect is you want to be upfront with your partner on what you’d like to have happen but then at the same time be able to incorporate their goals as well and reach a decision that works for both of you.
Bill: Yeah, couples need to communicate with each other. They need to talk about what’s most important to them. Sit down and rank and prioritize against the financial resources that are available and it’s really all about having a conversation of what’s of the most value? What’s most important to you? And these conversations need to be regular, they need to be respectful, they need to be calm, and they need to be as unemotional as possible. And each spouse needs to feel free to talk about what’s important for them, because really what it is is an expression of personal values. That they need to be listened to, to be heard, and to be respected, which leads to better decision making on the part of the couples. And through my career I have seen a number of couples divorce after children have left home. Raising the kids kept them together, so when the children left home the couples were forced to decide what the next chapter in their lives was going to look like. Ambitions and dreams that had been deferred or put on the back burner suddenly came to the forefront. And if these dreams for the rest of their lives don’t match up, then there can be a problem, in deciding which ones will be pursued and which ones will be funded. So unfortunately I’ve seen some of that happen with married people that had been married for twenty plus years. On a gender basis, men seem to see money as fuel for adventures, where women tend to see money as security in their later years. Since women tend to outlive men, that’s a natural concern. And then I’ve also seen couples that have divorced over money issues. As advisors, we want to help create and build wealth, but unfortunately divorce can lead to wealth destruction, or the killing of that compounding of money effect that we have talked about. I’ve also seen couples where one spouse secretly hides cash or the existence of a bank account or an investment account from the other spouse for fear of them spending the money.
Anastasia: Whoa, this quite a point to get to in your marriage. I mean that’s really a clear communication breakdown. And also just having different priorities, different ideas of how this money should be spent.
Bill: How the money should be spent, but even at a certain point in life, how they want to spend the rest of their life.
Anastasia: And that’s crazy to me that they wouldn’t be on the same page with that earlier. But I guess it’s hard for people to have a really in-depth conversation about what they want the rest of their life to look like when they’re getting married in their 20s?
Bill: And they’re focused on the marriage and having children and then suddenly having children completely changes their lives and they’re focused totally on the kids and their well-being, day after day after day. It’s what parents do, they sacrifice for their children, and then when the children are gone, it’s like, “Okay, what about me? What have I had to put aside for this?” And sometimes it’s not much, and sometimes it’s a lot. And sometimes if they don’t agree with their spouse on where they want to live or where they want to travel to or how they want to handle things in the future, that’s when the splits occur. And that’s why divorce is a major issue at the stage of life.
Anastasia: So what is your suggestion then for people to prevent this from happening, if it is preventable?
Anastasia: --Because sometimes you do have a changing priority, like maybe you do have this dream pop up later in life. Although I’d like to think that if you have a very big dream like that, that it’s something you’ve carried inside of you for a long time, before you get married (laughs) is what I’m saying.
Bill: Yeah, it could be something from childhood or could be something from early adulthood that got put aside. It’s important just to be completely open, communicate, be willing to compromise, and remember that when you got married you made a commitment to that person that was lifelong.
Anastasia: Because divorce is expensive.
Bill: Divorce is (sighs) I’ve seen more people be hurt by the decision to divorce than practically any other thing. It is just financially devastating and it’s emotionally devastating. And communication is the key and respect, compromise, and staying committed are the ways to get through it.
Bill: I make it sound like it’s tough.
Anastasia: (Laughs) It shouldn’t be too tough.
Bill: But if you’ve made the commitment, then you do whatever it takes to fulfill that.
Anastasia: Yeah and makes it all the more important to have these kinds of conversations before you make that commitment.
Bill: This has been a really interesting conversation because it’s emotional to talk about these things.
Anastasia: Yeah (laughs).
Bill: Here I am as a professional attempting to be unemotional about an emotional topic (laughs).
Anastasia: (Laughs) Here is my practical advice for dealing with this very personal topic. I mean that’s what makes it even more important to discuss, right? Because--
Anastasia: The problem happens when people don’t feel like they can be open about what their goals are and something so personal as how they spend their money, and they get into a commitment with someone and they have completely different ideas. (Laughs)
Anastasia: And another thing I thought of while we were talking about this was it’s an interesting perspective for me to hear that when people have children a lot of times what happens is that they have to kind of tamper down their personal goals and dreams? I mean that seems like kind of a sad perspective to have.
Bill: I believe it’s really important if a couple is considering getting married that they have a discussion about whether they want children or not, because having children is a life changing event, and as soon as you bring home that little smiling person, then suddenly you understand that your life has completely changed, like 180 degrees. And being a parent is about sacrifice. But I can tell you having raised four children with my wife of forty-two years, it’s been one of if not the most rewarding experiences of my life. And as a result of raising children, I think I’m a better person. And--
Anastasia:--I think I--
Bill: Go on.
Anastasia: --I just heard the studio audience go, “Aww.” (Laughs)
Bill: (Laughs) Eh, I guess that’s enough of that. (Laughs)
Anastasia: No! Sorry you were going to say something.
Bill: I forgot what it was.
Anastasia: Aww, merr. (Laughs)
Anastasia: Yes, clearly you have loved being a father and that is very adorable to hear as your daughter. (Laughs)
Bill: Well, if it wasn’t for you I wouldn’t be a father, so... (Laughs)
Anastasia: Well, me and three other kids that came before me, but (Laughs). I think you know again this is an important topic for people to discuss, to learn about. If people have any follow up questions on anything we’ve discussed, please let us know, we’d love to base a future podcast episode off of this. Dad, did you have any other comments that you wanted to mention?
Bill: Not today.
Anastasia: Perfect, well thank you again for a wonderful episode.
Bill: Thank you!
Anastasia: Thank you for listening to Creating Wealth! If you liked our podcast, please subscribe and consider recommending it to your friends or leaving us a review on your podcast app. We would love to discuss your questions. You can email them to us at email@example.com. You can also find full transcripts of every episode ontaberasset.com. That’s Taber with an “e” not an “o.” Thank you for joining us on the path to financial abundance. We’ll see you next time!