Could a Money Market Account Save Your Marriage?

A recent study showed that many couples are decidedly not on the same page when it comes to household finances. Cooperation on financial matters can be a key to a long and happy relationship. For newlyweds just starting out -- or maybe for established couples looking to get on the right financial track--a money market account can be the right place to start working together.

Survey says....

It's likely that the economic and financial setbacks of the past two years have put a strain on many couples' finances, and that strain shows in the results of the recent survey:

• Only 38% of couples reported making decisions together about retirement finances.
• A shockingly low number of couples--15%--felt that one spouse was prepared to assume financial responsibility if the other spouse died.
• Most couples (60%) disagree on when each spouse's retirement age will be, though tellingly, both husbands and wives expect to retire later now than they did a couple years ago.
• A significant percentage of couples disagree on a variety of other topics, from sources of retirement income to what standard of living they'd be able to maintain during retirement. What is perhaps most revealing is that 22% of couples even disagreed on how often they disagree about money.

It is worth noting that these results do not reflect the attitudes of younger adults who haven't had time to start thinking about retirement. Survey participants were between 45 and 72 years old.

The role of money market accounts

Where do money market accounts come into this picture of marital stress? The nature of these accounts can make a money market savings program the ideal place for a couple to start building a retirement nest egg.

In time, a couple will want to take advantage of long-term retirement vehicles such as 401(k) plans and IRAs to build that nest egg. However, because of the tax penalties involved in early withdrawal from these vehicles, they may represent too big a commitment for a those just starting to save money.

Indeed, the early days of any budget are subject to surprises, so some flexibility is needed. It is important to start the habit of moving some money out of the checking account, where it can be too easily accessed. However, since traditional savings accounts carry tight restrictions on how often their funds can be accessed, a money market account may be the ideal solution. It allows more access than a savings account, while paying more interest than a checking account.

Dealing with the money market account is also a simple way for couples to start working together on the division of responsibilities with respect to handling savings. There should be clearly-defined roles as to whose job it is to shop periodically for money market rates, and whose job it is to review the monthly statements. Most important, no matter who does what, the couple should regularly communicate about the status of the account.

The recent survey suggests that lack of cooperation on retirement savings could drive some couples apart. With a more coordinated effort, working toward a secure retirement could instead be something that helps keep couples together.

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