YOU ARE HERE: LAT HomeCollections

Retirement should be at top of spouses' saving, spending plans

Couples with different ideas on budgeting should find middle ground and then put the plan into action. Online calculators can help determine trade-offs needed for an adequate nest egg.

March 13, 2011|Liz Weston | Money Talk

Dear Liz: I recently got married and have always had a tight grip on my money. Now, I realize, I sometimes may come off as cheap. However, my husband has quite a different view on how and where money should go. As much as I would like to live "college broke" as long as possible (and I could), my husband has the mentality of, "I work hard for my money so I want to see the fruits of my labor." How can I find a rational middle ground? We have student loans still and he's planning to return for one more year of graduate education soon.

Answer: Congratulations. Marrying your financial opposite can be challenging, but it also can help you create a more balanced financial life. Savers can learn how to enjoy life today as well as save for tomorrow, while spenders can learn how budgeting and saving actually free them for a richer life overall.

You're off to a good start by recognizing that your partner's perspective is different from, but not worse than, your own. Frugal folks sometimes make the mistake of believing their approach to money is the only right way and insisting their spouses have to shape up, rather than recognizing these issues are subject to discussion and compromise.

Start by talking about retirement — when you'd like to quit work, where you'd like to live, what you'd like to do. Playing around with an online retirement calculator can give you both a better idea of the trade-offs you'll have to make. An early retirement with lots of travel may require a savings rate that's greater than he (and perhaps even you) would be willing to sustain. Retiring a bit later and spending somewhat less can lower the savings rate to something more comfortable.

Once you find the middle ground, put your plan into practice. Remember that retirement savings needs to come first, even when you have debts and are saving for other goals. Retirement will be expensive, and a delayed start on saving can cost you dearly.

The exercise of creating a retirement savings plan is good practice for every other discussion you'll have about money. There are always trade-offs involved, and both halves of a couple need to sign off on a money plan for it to work.

It also can help for each of you to have some "no questions asked" spending money, so you don't have to discuss and compromise over every dollar you spend. Another helpful idea is the "talk to me" limit in which any purchase over a certain dollar amount requires the consent of the other partner. The amount depends on the details of your finances; try $50 to start.

Getting advice can pay off at retirement

Dear Liz: How important is it to have a financial planner to help me plan for my retirement? I am 43. I must admit that trusting someone with my life savings is a daunting prospect, although I am also not too financially savvy.

Answer: You don't have to actually turn your life savings over to an advisor to get sound financial advice. Some fee-only planners charge by the hour to create recommendations for your portfolio, which you can then execute. You can get referrals to these fee-only, hourly planners via the Garrett Planning Network,

You have other options, as well. Sites including and offer software that can help you create a portfolio. Brokerages and mutual fund companies typically offer advice. Sometimes it's offered for a flat fee; other times, you pay commissions based on the advisor's recommendations.

If you educate yourself about investing, you may be able to do an OK job of building a portfolio on your own. But you really should consult an objective, experienced financial planner once you're within 10 years of retirement. It's really easy to make mistakes in the years immediately before and after retirement. If the mistakes are bad enough — retiring too soon, withdrawing too much, taking too much or too little risk — you could wind up paying for them for the rest of your life.

Liz Weston is the author of the upcoming book "The 10 Commandments of Money: Survive and Thrive in the New Economy." Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604 or via the "Contact Liz" form at Distributed by No More Red Inc.

Los Angeles Times Articles