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By Liza Horvath


Love and Money


Wealthy couples have long known that it is important to have a prenuptial agreement drawn up by a lawyer before marriage. Aside from understanding what would happen in case of a divorce, the process provides a way to flush out disagreements the couple may have about saving, spending and investing. However, unless you have financial assets to begin with or have children from a previous marriage, most couples see no need for a prenuptial agreement and the opportunity for an in-depth discussion regarding the financial life of the marriage can be lost. Because money is one of the major sources of marital discord and can be the toughest to resolve, not having a clear understanding of your own and your partner’s money motivators can lead to major disagreements later on. Our relationship with money is formed early in life and, unless we take the time to understand why we may overspend or save obsessively or why we link certain beliefs to money, this lack of self-knowledge can translate into destructive money habits in marriage.


Behavioral finance, a relatively new field of study, combines behavioral and cognitive theory with conventional economics and finance and seeks to explain why we respond the way we do to money. This new science shows that we can be “counseled” out of financial misbehavior and, maybe more importantly, recognizes and gives credence to the link between our spending and the underlying reasons for irrational money behavior. 


The financial investing world seized on the idea of behavioral finance, believing they can manipulate us into investing in certain funds or products and as a way to gain more “wallet share.” Ads with an eye toward triggering emotional response suggest to us – on a subconscious level – that a certain investment, car or sports drink will result in our feeling more secure, happy and fulfilled.  


Recognizing that emotions can drive financial behavior, how can couples that may not necessarily need a premarital agreement make sure that a healthy relationship is developed regarding comingled assets? Dave Jetson of Jetson Counseling, offers a Financial Recovery Workshop that helps clients understand the deeper motivations that cause them to interact with money in different ways. Jetson believes that when we understand the feelings that drive our financial decisions we can become empowered in the decision-making process.  If a workshop is not for you and hiring an attorney to draft a prenup is not appropriate, simple discussions with your future spouse can expose areas in which you may not agree when it comes to money. Exploration can lead to resolutions and commitments that may avoid future disagreements.  


When having the conversation with your betrothed, in addition to asking questions like: What is your earliest memory of money? Did your parents teach you about money and have you implicated those lessons in your own financial life? Discuss what will happen if your financial situation greatly changes. Jenny and Ralph had been happily married for 14-years when Ralph inherited a large sum of money from his father. Ralph said the inheritance was his separate money – which, legally – is true in California. Jenny felt that the money should become their community property and be used to purchase joint assets. Resentment led to arguments but they are now in counseling and will hopefully come to a solution. The more exploration and dialogue about money before the wedding, the better the marriage will be in the long run.

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com










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