First comes love, then comes marriage. But, what’s the cost of shared financial bliss? A recent survey conducted by TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD) and LearnVest revealed that the average couple discusses money less than two times a month and fights over money, on average, five times a year.
“With the median age for first-time marriages approaching 30*, combining finances is not as simple as it once was,” said Carrie Braxdale, managing director, investor services at TD Ameritrade. “Couples are bringing more financial baggage into the relationship than ever before. They have 401(k)s, student loan debt, investments and even mortgages. So, it’s more important than ever for couples to talk about their finances and work together to develop a plan.”
The Dating Game
When it comes to choosing the perfect partner, personality (20%), character (18%) and looks (17%) topped the list. Things like money (5%) and potential earnings (3%) were less important.
However, the survey found that certain poor financial habits are undesirable in a potential partner. Lack of motivation to get ahead (66%), relying on parents for financial support (65%), having significant credit card debt (65%) and poor money management skills (64%) were the most common financial deal-breakers when it comes to selecting a potential mate.
The survey also revealed some financial trust and transparency issues among couples:
- Forty percent (40%) of respondents said they do not completely trust their partner to manage their combined finances
- More than one in three (38%) said they were only somewhat, slightly or not at all aware of their significant other’s debts
- And one-fifth (21%) said they sometimes hide their spending from their significant other
According to the survey, nearly 60 percent of couples are paying for their own wedding, at an average cost of $28,000 for Gen Y. What’s more, that price tag doesn’t include the honeymoon costs, which adds another $3,400 on average. But, these young couples think it’s worth every penny – 82 percent say they don’t regret how much they spent on their wedding, and 89 percent don’t regret what they paid for their honeymoon.
The Honeymoon’s Over
Things like communication gaps and lack of budgeting could cause pain points for couples as they settle into married life. The survey found that 43 percent of couples admittedly don’t follow a budget, and half of couples jointly share household financial responsibilities. Female respondents said they were more likely to tackle groceries (48% vs. 25% of men), day-to-day expenses (28% vs. 26% of men) and the household budget (40% vs. 28% of men). Meanwhile, male respondents are more often solely responsible for investing decisions (45% vs. 27% of women), retirement savings (39% vs. 25% of women) and tax returns (44% vs. 32% of women).
“While discussing money may not be the most romantic of gestures, it is important to not only have those financial discussions early in a relationship, but to continue having them throughout your marriage to help avoid financial surprises and minimize financial arguments,” Braxdale continued.
Braxdale points out a few easy steps to get couples on the path to financial happiness:
- Talk about your financial situation before you walk down the aisle.
- Create a budget and talk about savings goals.
- Understand the amount and type of debt each partner brings into the marriage, agree on the plans to pay it off, and know your credit scores.
- Figure out how each partner manages money. You may be more frugal, but your partner may be more of a spender.
- Understand your investments and discuss how to meet your long-term goals.
- Don't leave it all to one partner. Joint participation in managing household finances is key.
For couples looking to take control of their financial planning, TD Ameritrade’s Life 2.0® and Retirement Planning websites offer access to free resources like retirement calculators and portfolio planners as well as information on how to make financial decisions that can help them pursue their financial goals—whether they are recent college graduates, adding to their family or entering their retirement years.
*D’Vera Cohn, et. al., “Barely Half of U.S. Adults Are Married – A Record Low,” Pew Research Center, Dec. 14, 2011.
About the Survey
The research was conducted among 2,135 male and female respondents in total: 370 in the Generation Z age bracket (18 to 23 years old), 400 in Generation Y (24 to 35 years of age), 400 in Generation X (36 to 47 years of age), 457 baby boomers (48 to 66 years of age) and 400 respondents who were members of the Mature Generation (67 to 82 years of age). A total of 108 additional participants were current LearnVest subscribers. And all generations were weighted 50/50 male and female. The research was collected online via a 25-minute online interview conducted between September 26 and October 3, 2012. In order to qualify for the study, a respondent had to meet three requirements: The individual’s age had to fall within the five aforementioned generations, the respondent needed to live with their significant other and he/she had to have savings and investments totaling at least $10,000. The 108 LearnVest subscribers were recruited via email from the company database, and each respondent who completed the survey received a $10 Amazon.com gift card.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how – bringing Wall Street to Main Street for more than 36 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information.
TD Ameritrade, Amazon, the Pew Research Center and LearnVest are separate and unaffiliated companies that are not responsible for one another’s services and policies.
LearnVest is a unique personal finance platform that combines accessible content, best-in-class online tools, and through its subsidiary LearnVest Planning, provides high-quality, fee-based financial advisory services delivered by Certified Financial Planners™. LearnVest Planning, a registered investment advisor, is redefining the traditional financial planning market with a dynamic, technology-enabled service that gives clients nationwide constant access to financial experts. Since launch, LearnVest has raised over $25mm in venture financing (led by Accel Partners) and been awarded numerous accolades, including one of Time’s "50 Best Websites of 2011" and back-to-back Best of Show awards at FinovateFall 2011 and 2012. LearnVest’s Board of Advisors includes: Lee Barba (Former CEO, Investools/thinkorswim), Theresia Gouw (Partner, Accel Partners) and Ann Kaplan (Former Partner, Goldman Sachs). Formal Advisors include Greg Waldorf (Former CEO, eHarmony), Greg Coleman (Former President, Huffington Post), Catherine Levene (Former COO, DailyCandy) and most recently, Susan Lyne (Chairman, Gilt Groupe). For more information about LearnVest, please visit www.learnvest.com.
Christina Goethe, 201-369-8541
Communications & Public Affairs
On Twitter @TDAmeritradePR
Jeff Goeser, 402-597-8464
Investor Relations & Finance
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