The pandemic has caused an increase in the number of people seeking financial advice in the US. Many seek help with repaying debt, budgeting, and retirement planning due to high living costs, slow wage growth, and economic uncertainty.
Interestingly, even financial advisors face money challenges. Recently, financial guru Dave Ramsey shed light on how even registered certified financial planners (CFP) face massive debts and liabilities. He connected with a CFP carrying over $400,000 in debt, spread across mortgages, student loans, and personal loans from his family.
The biggest challenge for the CFP is that he can't get his wife to combine finances to overcome their financial situation. They have been married for over a year and have known each other for six years. During a call with Ramsey, he explained that the issue around sharing finances has persisted and has yet to improve despite tying the knot last year.
The CFP needed help communicating with his partner about combining their income instead of keeping them separate to overcome their debts. One effective strategy could be to schedule regular financial meetings where both parties can openly discuss their financial situation, goals, and concerns. This can help create a safe space for financial discussions and foster a sense of shared responsibility.
Ramsey emphasized that when married, discussing combining all assets and liabilities and facing the challenges together as one unit is not just a financial strategy, but a path to a happier relationship.
He believes reluctance to combine finances or lives after marriage can be disturbing, but the challenge is expected. A recent poll of 2,000 Americans revealed that only 11% of couples split bills based on income levels, and 34% maintained separate accounts. Furthermore, 32% hid their debts from partners, likely contributing to another finding where the average couple had money fights at least once a month.
Ramsey said that all data points and his studies on thousands of millionaires point to one simple fact: keeping finances separate in a marriage doesn't work. Maintaining separate finances can lead to a lack of transparency, unequal financial burdens, and potential conflicts over money. Understanding these risks can help the CFP and his spouse make an informed decision about their financial strategy.
For instance, most millionaires Ramsey has studied believed they could become millionaires because their partners joined arms with them and fought against all odds with a unified approach to get there. They set clear financial goals, created a budget, and regularly reviewed their progress. This disciplined approach to financial planning can be a source of inspiration for the CFP and his spouse as they navigate their own financial journey.
Ramsey also highlighted that one thing that could be happening is that in terms of personality, the CFP is all "math," and she might be "art and healing." It means the last thing she wants to do is turn over her little autonomy to a control freak "math nerd," he said. Ramsey believes one cannot become a good CFP if you aren't a math nerd, and nothing's wrong with that because it is their job to be strict with finances.
However, he stressed that things that allow CFPs to be good at their job, like being a control freak math nerd, could work against the relationship.
Ramsey recommended that the CFP get his wife's input and agreements on the final decisions for transparency and to avoid future disputes. It's important to approach these discussions with empathy and understanding, acknowledging that financial decisions can be emotionally charged. Hence, resetting the table on finances from "I am an expert" to "we have to have an equal footing" in making money moves is critical to overcoming debt and building trust.
When you handle your money together, you are handling your life together. It changes everything, Ramsey concluded.
