March 2022 Issue: Behavioral Finance Dynamics by Linda Leitz-Behavioral Finance Dynamics by Linda Leitz

Behavioral Finance Dynamics by Linda Leitz

Pdf Summary

Addressing behavioral finance dynamics within a couple is crucial for financial planners. Mismatched money histories, fears, and confidences can put stress on both the couple and the planner's ability to help them reach their life goals. Research shows that perceptions of financial situations affect both men and women, but they think differently about finances. Husbands tend to have higher financial and marital satisfaction if their wives are spenders. However, wives may have higher marital satisfaction but lower financial satisfaction, indicating that financial satisfaction is not directly tied to spending but rather to understanding and feeling at peace with their financial lives. Financial planners need to understand each spouse's background, beliefs about money, and how they think about and interact with money. It is essential to listen to both spouses and treat them as a team for financial decisions. Planners can use exercises and provide skills for regular team meetings about finances. Getting educated on behavioral finance and client communication through CFP and NAPFA continuing education is recommended. Planners can also outsource behavioral finance issues to professionals who specialize in emotional issues related to money. Safe spaces for spouses to be heard and air their concerns can help them move forward together, and involving professionals in this process may be necessary.

Keywords

behavioral finance dynamics

financial planners

couple

financial stress

perceptions of financial situations

marital satisfaction

spenders

understanding financial lives

team for financial decisions

outsourcing behavioral finance issues