Marriage and Money – A Case about Advising Spouses

Tricky matter, I know. 

Whether you’re an Advisor or just reading this from a personal finance perspective, I think there’s a lesson to be learnt with this case, so here goes: 

For over 11 years now, I’ve been serving as Financial Advisor to Arya and Raj Menon.  

Arya was my client first, since before she met Raj. I’ve handled her insurance and investment matters for over 18 years now. 

When the couple got married, Arya decided to take a sabbatical from work, and Raj took over the household’s financial aspects. He had been working with an Advisor himself and chose to continue to work with him for their collective finances. 

So, I took a bit of a back seat there. I did, however, continue to service Arya’s existing contracts and investments, for which we set up our regular review meetings as we always had. 

Over the years, Raj’s Financial Advisor moved on and could no longer handle their finances. Raj then approached me to handle their family finances. Arya insisted, however, that all of her contracts and finances be kept out of discussion when I was working with Raj on their collective finances. 

As her Advisor, I am obligated to that confidentiality for policies that she owns, and so I treated her finances and their family finances as two separate client dealings. 

A couple of years in, Raj and Arya had a daughter. Arya decided not to return to work, but she kept honing her skills and developing as a professional even while she was a stay-at-home parent. 

Sadly, however, the couple kept growing distant and when their daughter was a few years older, Arya and Raj decided that the marriage wasn’t working out anymore and they decided to go their separate ways. 

What happened to their finances?

By this point, Arya had been growing her investments and money steadily, with Raj still having no knowledge of that growing pot. She’d also invested a fair amount of money from her family, all of which she invested with me in low-risk asset classes. 

She considered that money a safety net for herself and her daughter, should things go south with their family finances. 

Precautions like this often come from a gut instinct, or from a place of knowing, or from a difficult personal experience. Whatever the case was, Arya had prepared and so when the going got tough, she was ready. 

After the separation, Raj lost his job and simultaneously, a couple of his property investments went wrong. He tried his hand with two businesses but neither of them took off. 

He was in a rough patch, and his dwindling finances couldn’t hold up the upkeep of their property, nor their daughter’s financial needs or education fees. 

Although Arya hadn’t been in full-time employment, she had been learning and developing skills that she quickly put to use to generate an income for herself and her daughter. 

With that income and her growing investments, Arya continued to pay for the upkeep of the property, took care of her daughter’s and her own financial needs and kept paying into her Life Insurance policy and other investment plans. 

She wanted to make sure their daughter wasn’t affected by their financial ups and downs. 

Although a rather uncomfortable situation on the surface, I think there’s something to be learnt here about spouses keeping their finances separate. 

In Arya and Raj’s case, the fact that Arya grew her investments privately, and kept her finances separate from her husband’s meant that she could provide the family the stability they needed when Raj’s financial situation was unstable. 

It gave him the room to breathe and take financial decisions without worrying about the family’s needs. 

It’s not a rosy story to tell, but it’s a valuable one. 

Food for thought

A lot of homemakers leave the finances completely to the breadwinner in the family, making them completely dependent on one source of income and leaving one person in the marriage shouldering the whole money management responsibility.  

In the case that something happens to the breadwinner, or in the case of a separation like Arya and Raj’s, a second financial leg to stand on proves incredibly important, don’t you think? 

Touchy matter, marriage and money, but thoughts, anyone? Is the safety net worth the gaping trust hole that comes out of separate finances?