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Episode Summary

In this episode, Gideon Drucker and Jordan Haynes explore how couples can build a shared financial vision even when they think about money very differently.

They break down three common relationship dynamics: couples with different financial personalities, couples where one person manages most of the finances, and couples who are almost completely aligned.

Through real client stories, they explain how communication, trade-offs, and an objective outside perspective can help couples make better financial decisions.

The episode also shows why understanding each partner’s money story and shared values is essential to creating a financial plan that works for both people.

Topics Covered

Introduction [00:00]

Your Financial Decisions Begin With Your Money Story [02:52]

Building a Shared Financial Identity [05:19]

When One Spouse Is a Spender and the Other Is a Saver [06:30]

Why Financial Planning Is Better Than Compromising [11:56]

When One Spouse Manages All the Money [14:14]

The Hidden Risk of Being Completely Aligned [18:14]

Finding the Values That Bring Your Financial Vision Together [24:11]

Resources & Links

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Transcript

Below is the full transcript for Episode 11 of Beyond the First Million.

Introduction [00:00]

Gideon: Welcome to Beyond the First Million with myself, Gideon Drucker, and my much taller colleague, Jordan Haynes. If you want to know what it means to be an introvert versus an extrovert, you need to watch Jordan and me for the 20 minutes before we film. I am literally like a statue. I’m writing, I’m editing, and I’m just peaceful by myself. I need to preserve my energy. You’ve had an hour-and-a-half conversation about God knows what, without a care in the world. As soon as the camera turns on, you’re good? Yeah, why wouldn’t I be good?

Jordan: I’m the guy, as I was just telling him, who talks to the Uber driver. This is probably a nice revelation for the listeners because, in these episodes, you’re doing a lot of the talking, which is great, and I’m more just adding to it. So, off camera, I’m doing the talking.

Gideon: Yeah, exactly.

Jordan: Although mostly nonsense.

Gideon: Off camera, I can be off camera, but we are on camera, and we want to share what we’re talking about today. It’s going to be all about financial planning as a couple. I think we’re both excited to do this particular episode because there are so many stories that we could have pulled from. I’m going to start with one that really happened. This was a few months ago. They’re great clients and actually avid listeners, so I know they’re going to hear the story as I’m sharing it. We were on a prospective client call, and it was, I think, the very first Right Fit call with a husband and wife.

About five minutes into the conversation, I asked, “What are you interested in? What do you need help with?” The wife says, “Yeah, so I’m really interested in living life, creating memories for my family, and doing exciting things. My husband just wants to save it all until we’re old, gray, and 80, and we can’t do anything with it. So that’s our family in a nutshell.” Now, granted, she was making a joke, and he was on the call. He’s like, “Yeah, that pretty much sums up how we think about money.”

Obviously, they were exaggerating for emphasis, but kudos to them. They were letting us know, “Hey, we think about money a little bit differently. We’re aware of it, and we’d like your team’s help to formulate a family plan. How do we combine this? How do we think about it together?” She wasn’t making fun of him. I mean, she was a little bit, and I’m not making fun of them by telling the story. But that is a lot of what we do when helping clients with their financial planning.

Something that you and I have learned over the years is that most financial planning problems are not problems that can be solved on a spreadsheet. In the last episode, we talked about investing and rates of return, and all of that matters. But when it comes down to it, most of what we’re talking about with clients is more about decision-making, communication, competing priorities, and even competing life visions for how you want things to go. That’s everything we’re going to be talking about today.

Your Financial Decisions Begin With Your Money Story [02:52]

Jordan: One of our favorite thinkers in our space is Carl Richards. I know you’ve listened to a few of his conversations, but he’s done something at events that I’ve actually been to where he’ll draw a dollar sign and just ask what comes to mind, like the first word that comes to mind. It’s really interesting because everyone is so different. Some people have said, “Traumatic.” Some people have said, “Opportunity” or “Exciting.” The emotions as they relate to money are so different. That’s obvious, right? Everyone has different experiences.

When you start to merge a life together with someone else who has different emotions about money, different goals, different attitudes, and different feelings about it, it’s really difficult to figure out which direction to go. There’s not a right answer. Everyone is different for a reason. There’s not a right way to do money. Navigating and merging those things together is tough.

Gideon: It’s funny, I’ve been in that room where Carl draws the dollar sign. Again, it’s not like everybody should just be doing that. There’s a way he gets to that point. But I was in one where somebody just said, “My dad.” He said his dad grinded his whole life in a job that did not pay a lot of money to get him to a point where he could become a financial planner and take care of his family at a certain level.

Any decision he makes about money, even when he decides to get a bagel and spend $10, brings up something about his dad and his childhood. That wasn’t a decision that was so free for his parents growing up. All Carl did was put a dollar sign on a whiteboard, and all of that came out.

We all have our own money story. I think we both know that the way somebody thinks about their finances, whether they want a vacation home, want to buy a home, want to rent, how much they want to save, or how much they want to defer to the future, all of it really comes from, if you dig deep enough, how they grew up with money. It’s, “Hey, my parents did a fantastic job of saving and building, and I want to be able to provide my kids with the same life I had.” Or, alternatively, “Yeah, my parents did a lot of cool things, but now they’re in their 70s and they’re not in a very good financial position. I don’t want to be in that position.”

Those are extremes, but I think a lot of how we relate to money comes from those experiences. Something you do have to work through is that you have your story, your spouse has theirs, and now you need to say, “How do we build a joint vision and a joint financial way of thinking about things?” By the way, this episode is not about whether you need to open a joint investment account, and it isn’t about where money is allocated. It’s about how you think through a financial vision that includes both of your stories, which are probably totally separate, and combine them into the same thing.

Jordan: Yeah, love it.

Building a Shared Financial Identity [05:19]

Gideon: Marriage creates a new challenge when it comes to financially building a vision that supports what you want to do. Now, you have to create something entirely new: a shared financial identity. You need to build a new, coherent financial life. It’s one of the reasons that I think a lot of our clients, not everybody, of course, but many of our clients, are couples. You’re adding another variable to your spending decisions and saving decisions.When you have kids, there are even more financial decisions and inflection points that you need to consider. You’re thinking about education funding and legacy planning. Do we pay for private school? There are so many additional decisions that come into play.

The way we want to frame this particular episode is that, when it comes to working with couples, I would say there are three archetypal dynamics that we see. Probably the most common is when both people in a couple are engaged. They both care about the money conversation, financial planning, investing, and what have you, but they’re wired totally differently. Somebody’s a spender, somebody’s a saver, somebody’s a little more optimistic, and the other person thinks, “Hey, the sky is falling.” They have two totally different ways of projecting things into the future. Everybody thinks differently about money, and I know we have a story, if you want to share it.

When One Spouse Is a Spender and the Other Is a Saver [06:30]

Jordan: When we work with a client and build their financial life plan, we are trying to incorporate the emotions, feelings, goals, and ambitions, as well as the pure numbers, like what you can actually do.

Gideon: So often, it’s: What can you afford? What can’t you afford? If you could afford that, what would we have to change over here? Then we bring that all together into one coherent scenario plan that they can actually live through.

Jordan: Yeah, and one of the best ways we’ve found to present this and explore different paths is to look at different scenarios. Every decision has trade-offs, and our job is to say, “Here are the trade-offs,” and do so as unemotionally as possible.

This happens a lot when we present and look at a decision a couple wants to make. For example, they might want to buy a bigger home in a different place, and when we bring that up, it can spur some emotion. I think, in this case, they wanted to retire early, buy a much bigger primary home, and spend a lot more on vacations. Their kids were getting a little older, so they could travel more. We laid it out and said, “Hey, doing all three of these simultaneously is going to be difficult when we look at your cash flow, your savings rate, and your existing net worth.”

I remember the wife looked at her husband and said, “I’ve been saying this for years. We can’t do all three of these things. I don’t really understand how you thought we could. Jordan and Gideon, this is great, but I’ve been saying this the whole time.” And yes, she was right. If they tried to do all three things with no other changes to their income, it was going to be difficult. He responded, and it really was like that on the call. I think she yelled at him a little bit while we were just sitting there waiting.

Having those types of conversations with an objective third party who is not emotionally tied to either perspective or way of thinking is helpful. We don’t give a shit who’s right. We’re not trying to make one person happy. We’re coming in and saying, “What is the math going to support, and what is going to allow you to accomplish the most of what’s most important?”

Sometimes, it’s just being able to sit in a meeting, not speak, let things air out, and then move forward. I mean, I’m describing a couples therapist in a way. Obviously, that’s not what we do, but there is a degree of letting people have conversations they would never actually have in the course of their day. You’re not going to drop your kids off at soccer practice, make dinner, go back to work, and then have a life conversation about buying a larger home, vacations, trade-offs, and when you can retire. I’ve only been married for eight months, but I don’t think that’s an average Tuesday night at the dinner table. We’re just giving that conversation room to breathe.

The husband’s takeaway was interesting. He came back and said, “Yeah, that’s all true. That makes sense, but let’s just get rid of the international home, and I’ll work another three years. I was being conservative about my income, so let’s assume I make an extra $300,000.” His reaction was basically, “All right, I hear you, but I was just trying to workshop ideas.” He wasn’t taking any of those goals as something that absolutely had to happen.

He was like, “We’re doing the big primary home, we’re going to travel more, and everything else can fall by the wayside.” They got to a point where they were on the same page because all she cared about was making sure they were secure. She wanted to know, “If we buy this home and do these other things, are we going to run out of money?”

As long as he got the plan back to a point where the answer was no, they weren’t going to run out of money because they weren’t going to do the other three things they originally asked us to show, they ended up in a good place. That’s the moral of the story. They just thought about money differently.

They got to a good place, but it took hashing things out in real time to get there. A lot of times, an argument happens and then falls by the wayside. It just kind of goes away. How often are couples actually outlining what’s most important to them, line by line? “This is our top priority. It’s the primary home because we have two kids and need more space.” Then everything supports that vision, and we take it from there. They needed to have that conversation before they could reach the outcome.

Jordan: Yeah, I think my two takeaways from this are, number one, to the point you just made, having a shared vision is really important. That’s a relatively easy conversation to have. When I think about the two stories you shared, the first client story and then the one you just shared, the difference I notice is that the first couple knew each other well enough that they were comfortable talking about it out loud. “He’s a spender, I’m a saver,” or, “He’s a saver, I’m a spender. These are the things we want.” They were okay with it. That had already been cleared. The second couple maybe hadn’t had that clear conversation about what those things were. In my own relationship, I’m a dreamer. Money, to me, is enabling. I’m always thinking about the big next thing and how we’re going to—

Gideon: The bigger, the big picture.

Jordan: My wife very much sees money as restrictive. It’s, “What if we don’t have enough?” For the first 10 years of our marriage, it’s been about her becoming comfortable with me dreaming and not taking everything I say as, “We are going to do this.” Now we know that about each other, so it’s kind of cleared. Neither of us is wrong. Neither perspective is wrong, and neither lens is wrong. I think that’s the point we’re making here. If you are in a relationship with someone, you’re both going to have very different opinions, feelings, and attitudes about money, and neither of them is bad. They’re both there for a reason. Just understanding that is really helpful.

Gideon: I’m glad you said how long you’ve been married because I feel like people would be listening, hearing that I got married within the last 12 months, and thinking, “This dude is giving marriage and couples financial-planning advice? He’s been married for a week and a half.” So, 10 years, friends. Ten years. He knows what he’s talking about, even if I’m new to the marriage game.

Why Financial Planning Is Better Than Compromising [11:56]

Gideon: Unrelated to this, but I was listening to Jeff Bezos do an interview recently, and he was talking about good and bad types of conflict resolution. His first point was that compromise sounds healthy, right? It’s like, “Oh, we should want to compromise.” But he was saying compromise is usually not the best way of arriving at an outcome.

What is compromise at the end of the day? It’s kind of both people wanting to be agreeable more than they want to be truth-seeking, as he put it. It’s like, “All right, I think 10 and you think zero, so let’s land at five. That works for both of us.” But there are certain things, including certain things in financial planning, where no, it’s either closer to 10 or it’s closer to zero.

His example was, “How high is the ceiling?” If I said it’s 20 feet and you said it’s five, we shouldn’t compromise and meet in the middle. We should take out a tape measure and figure it out. You would probably help more than me because the ceiling is pretty high, but we would figure out how tall it actually is. That’s a lot of what we’re talking about with financial planning.

Compromise can come in from the context of, “Hey, you want to do this, and you want to do that, but how do we make sure we can do the most of what you both want to do?” Maybe you compromise once you’ve done the legwork and said, “Here’s what’s feasible. Here’s where you can land. We can do all of this, but this part is going to be tough.”

It’s not just, “Hey, we want two totally different things, so we’re going to meet in the middle.” I think that’s what doing the plan, doing the work, and having the conversations gets at. It’s not compromise. You’re getting to an outcome where both people can be happy, even if they end up in different places than where they started.

The other type of conflict resolution that isn’t the best is when one person just exhausts the other person. It’s kind of like whoever is more stubborn, louder, or cares more wins, so to speak. Looking back at all of our meetings with couples, I wouldn’t say anybody has ever really “won,” where we’re just following one person’s lead.

Each person comes in with their own story. We build a shared vision and set of goals, and then we figure out how they want to get there. They both agree, and instead of either one feeling like they’re sticking to their old map, they’re building a new one together. We’re trying to find the truth and figure out what actually makes the most sense based on their shared vision.

Jordan: Yeah, you want a shared, true reality, something you can anchor yourself to. Sometimes, when we’re operating only within feelings, we’re just trying to prove who’s right and who’s wrong, and that’s it.

When One Spouse Manages All the Money [14:14]

Gideon: And it starts there. If we’ve done our job, it doesn’t end there. The second dynamic is similar to what we said about winning the argument, where one person is more financially interested and involved, and they run everything in the household. One spouse handles virtually all of the finances, and the other spouse isn’t really that interested.

What’s interesting, from my perspective, is how many new clients and new calls we get. You might think it’s the disinterested spouse reaching out for financial help because they want to make sure their spouse is doing the right things or they want to learn more. Usually, it’s not. It’s usually the spouse who is tasked with running the financial plan who gets to a point where they’re exhausted from doing everything themselves.

They want a second opinion, a thought partner, and somebody to help educate their spouse on all the things they may have wanted to incorporate into the plan. Let’s be honest, it’s sometimes tougher to listen to your spouse about certain things than it is to listen to an objective outside voice. They’re hiring a financial planner, in this case us, to help educate their spouse. It’s, “I want you to know enough in case, God forbid, something happens, but I’d also like to be able to share some of this with you.” We bring them along slowly.

That’s how my family was when I was growing up. Granted, my dad is a financial planner, so maybe it was a little more obvious. My wife and I are the same way. By the way, this is not a gender thing. In the past, it was usually the 1950s version where the man ran the finances and the wife wasn’t involved. I would say that, for our clients, it’s at least 50/50, if not more. Regardless, that’s not the point.

It’s natural for one person in a relationship to handle the finances. That’s how couples work. You delegate everything. One person handles the landscaping, one person handles something else, and it’s kind of inevitable that one person is going to be more interested in the finances.

This is not a bad thing. What we both know is super important is that both people need to be involved in the big decisions. Are you on track for retirement? How do you want to think about your kids’ education? When can you buy the vacation home? All of the major life decisions.

Jordan: I don’t know if we’ve talked about this framework before. This is something you brought to me a few months ago, and we’ve incorporated it into our financial life plan process. We talk a lot about direction, details, and decisions. When we look at that, we want both people to be involved in the direction because we’re moving toward something.

Gideon: The order of operations is that you start with...

Jordan: Direction: Where are we going? Details: How are we going to get there? Then making the final decision and taking action. You go in that order. We want both people in the couple to be involved in setting that direction.

I’ve had situations in the past with client couples where the direction was established by one person and not bought into by the other. We started moving in that direction and realized, “This is not what’s going to happen. This person is not involved or excited about it.” That’s where it gets really tricky. So yes, both people need to be involved in the direction, but after that, how we actually get there can involve the tactical details.

Gideon: Right. You have an advisor, and you trust them to get to the tactical pieces. You’ve already done most of the work by setting the direction and deciding what you’re trying to accomplish.

To your point about direction, I had a delivery meeting, our first delivery meeting, which is really the meeting where we talk about the life-planning scenarios. Someone said her husband wasn’t going to be able to join the meeting. We had planned it three weeks in advance. They were super busy and had three kids.

I said, honestly, there are other meetings where I would just go with the flow. If we needed to map out the individual investment pieces, that would be totally fine. But I said, “We have to reschedule this meeting.” I would be doing a disservice to both of them if we went through all of the scenarios, got feedback, and made adjustments without both of them there. I’m sorry, but we have to reschedule. It was important that they both had time to be in the meeting together and map it out.

Again, there’s nothing wrong with one spouse wanting to lead the charge and handle the finances. We just know it’s really important that both people are involved in the big decisions that matter. We come across couples where one person is the artist and the other person is the finance person. One person works in tech and isn’t paying attention to their stock options, while the other spouse has basically been managing those stock options for seven years. This is all normal. Every couple finds its own cadence and its own way of doing things. We’re simply going to have our way of helping with our little sliver of the financial domain.

The Hidden Risk of Being Completely Aligned [18:14]

Gideon: The third dynamic is the most straightforward: total alignment, where you think about money the same way. You’re basically on the same page about what you’re trying to accomplish financially. Now, you might say, “Well, this is the best and easiest way,” because you don’t need to change perspectives. You don’t even really need to take two individual plans and build a shared plan because you’re already there. That’s all true, but there’s one thing, I wouldn’t call it a problem, that you want to be aware of, which is tunnel vision.

If you think about things the exact same way as your spouse financially, it can be, “We need to buy this home. We both want to spend $5 million on this home. We’re committed, and we think it’s the most important thing in the world.” You don’t have anybody in the household saying, “Can we afford this? Is this really the best thing we should be doing?” If opposites attract, I would say that, financially, it can be a good thing for people to be wired a little differently when they’re thinking about their future.

I think about a couple we worked with recently. I would say they were both very optimistic that things would work out. They wanted what they wanted and didn’t really want to entertain the idea of, “What if this doesn’t work out?” Again, they obviously wanted to entertain that possibility a little bit, or they wouldn’t have hired us in the first place. We’re not going to rubber-stamp somebody’s financial decisions if they don’t work.

They wanted to spend about $50,000 a year on vacations. I like giving the numbers because, first, they’re not made-up stories, and second, they help put things into perspective. They made about $400,000 a year, which is good money, but it’s not necessarily the level of income where you can spend $50,000 a year on travel while also doing everything else they wanted to do. I remember we had multiple meetings where we framed it that way. We said, “This travel budget and your goal of retiring early are at odds. We have to make some choices.” I think they were seeing things a little too black and white, as if we were saying, “Don’t travel.” We weren’t saying that. We were saying, “What if $50,000 became $25,000? How would you travel differently?” At that amount, I would argue that it might not even change how often they travel or where they go. It would just require them to be a little more thoughtful about how they spend. But they had a tough time taking in that information because they were so aligned on the idea that travel was extremely important. It took a few meetings to say, “Guys, we hear you. Ultimately, our job is to support whatever vision you bring to us. If you tell us, ‘We’re doing this,’ then our job is to explain what that means.” It could mean working an additional three years or not being able to save as aggressively for their kids’ education. It might become a question of, “Can we fully fund education, or can we fully fund retirement?” At some point, you have to decide what you care about most.

Honestly, that’s still somewhat of an open question for them. I think the reason I’m bringing it up is that they had been attached to this idea for so long without an outside voice saying, “You know what? Spending $50,000 a year on travel at your income level may not be sustainable.” They were so aligned that they couldn’t entertain ideas outside of what they had already decided.

Jordan: The greatest pitfall for people who are totally aligned and have very similar temperaments is the echo chamber. It’s not necessarily saying that things have been bad or that you’ve made bad decisions. It’s just asking, “Are you seeing what you don’t see?”

It’s pretty common for us to get a new client where both people are aligned, engaged, and very similar. One of the first things they say to us is, “We’re here because we need someone else. We’ve done everything we know how to do.”

Gideon: They want to make sure they’re not missing anything. In general, a lot of our clients come to us making a lot of money. They’re sharp, they’re smart, and they’re already doing most of the right things. It’s not like we’re getting people who have no idea about any of this. They already have a strong baseline.

To bring it back to couples, we help both spouses see the vision, and then you add kids and everything that comes with that. We are the outside, objective voice helping to keep them on the right track.

I think we mentioned a personal trainer in an earlier episode. My sister is, or was, a personal trainer. Right now, she has a five-year-old, a three-and-a-half-year-old, and a one-year-old, and she’s seemingly fighting for her life on a daily basis. She has Drucker Fitness, which is currently dormant but will hopefully come back soon. When she works with clients, part of the reason they want her there is that they can show up and simply be told what to do. They want to walk out having had a great workout with their brains turned off a little bit.

For a lot of our clients, they’ve been doing all of this entirely by themselves. Most of our clients have stock options and equity compensation, and there are so many other things they need to manage. It would be nice not to have to think through all of it every single time. They can show up to a meeting about their money, Jordan has built the agenda and mapped out how everything comes together, and they can simply react.

That’s the standard. I’ll wrap up here with an example from consultants, my CPA, or other professionals where I’m the client. Sometimes it drives me crazy when I show up to a meeting and they ask me to set the agenda. It’s like, “No, you’re in charge. I’m hiring and paying you. Lay out what we should be talking about. I’m coming from my world into this meeting to enter your world.” When we’re talking about a shared financial identity, having an outside person move the process along is a big part of why you would seek out a planner in the first place.

Jordan: “Proactive” is the word a lot of clients use. They say, “I’m looking for someone who is proactive in my life,” and that’s what they’re looking for.

My biggest takeaway, and the one thing I would want our listeners to take from this conversation, is that there isn’t really one right way to navigate your relationship with money and your spouse or partner. There isn’t one right way to do it.

I would say the only wrong way is to never talk about it and not know what your style is. Do you have the same temperament, and are you both highly engaged with money? Does one of you tend to be more engaged? Or are both of you engaged and basically the exact same person? It doesn’t matter all that much. You just need to know what your dynamic is so you can start navigating it in the right way. The only wrong way is to never understand it.

Gideon: Or to wait until you’re in your 50s or 60s, when it has already become a source of frustration.

Finding the Values That Bring Your Financial Vision Together [24:11]

Jordan: I want to share one story, and then you can close this out. I think our parents are similar. My father retired about three years ago, and I did an exercise with them. I had a deck of cards, and each card had a word on it. The idea was to get a sense of their values. I had them sit across from each other at the dinner table. It was just me and them, and I was trying to learn how to do this exercise. You take the deck of cards and narrow it down into a pyramid of the 10 most important words, and then talk about what those words mean to you. We did it, and they were so different. These are people who had been married for 30 years, and you would expect them to be totally aligned.

My mom’s values were very much centered around learning, home, beauty, and things like that. My dad’s were more about adventure and excitement. Having them talk about it helped them realize, “Oh, so that’s what really drives you.” The values they shared were home and family, and that was really important. When we did this, my dad was in the process of retiring, and it allowed them to get centered around what their common vision was.

Gideon: What they wanted to do for the next five years.

Jordan: Exactly. They wanted to have a home that people could come to and maintain this focus on family. It cleared up a lot of things because now they knew she loved learning and he loved adventure. They could blend the two together and have fun with it. So, just know what’s important to you.

Gideon: How many siblings do you have?

Jordan: I have four siblings.

Gideon: Did that conversation lock in your status as the favorite child, or did you already have that locked down?

Jordan: My dad is listening to this, and he knows that’s my catchphrase, that I’m the favorite. He’ll never say it, though.

Gideon: That must be nice. My sister gave my parents grandkids, so for the time being, she took my number-one spot.

Jordan: I gave my parents their first grandkids, so maybe...

Gideon: I’m telling you, you locked it in at that point. Everybody else is just playing for second place.

All right, guys, that’ll do it for today. We appreciate you being with us. If there’s anything you want us to talk about in future episodes, send us a note. We’ll be back next Thursday. Have a fantastic rest of the week!