How to convince your Spouse to start investing in Mutual Funds and Stocks?

Spouse Money Investing

In the First Personal Financial Concerns Survey, many questions were asked about how to convince one’s spouse to reduce expenses and increase/start investing.

Now the first part: about reducing expenses, is tough.

And frankly speaking, it’s much tougher than most staunch advocates of frugal living might make it sound. Infact, expenses have this bad habit of beating income increases every year. 🙂

But jokes apart, the survey did point towards one clear problem:

Not every couple thinks on same lines when it comes to money. At times, husbands have no clue whatsoever about the benefits of investing and at times, wives cannot stop themselves from spending.

So what I will do in this post is to share my views on the second part, i.e. start investing. Deliberately, I will leave out the first part (about reducing expenses) and play safe with female readers. 🙂

Let me first share few extracts from survey responses:

Respondent 1:

“My wife wants safety in all investments. She is against investing in any mutual funds (especially equity) because of the NAV fluctuations. I know that daily fluctuations are a common phenomenon and there is no need to worry about it. But even then, I am being forced to invest more in FDs, which I don’t like personally….My goal is to invest for my retirement…”

Respondent 2:

“Currently my spouse is working but may leave her job after few years. Though she does not want me to spend her money, she herself is of the free-spending kinds. Tell me something which will nudge her to reduce expenses and start saving for our single-income days in future…”

Respondent 3:

“…I regularly send personal finance articles to my wife to help her understand the concepts of spending less and investing more. But she never reads them. How to convince her about the benefits of investing?”

I am sure these extracts would sound familiar to many of you. 🙂


How can You convince your Spouse to get serious about investing?

But before I try answering that question, I think I should share about my own personal experience here too…

I would say that I am lucky. My wife is an investor in her own right. We both spend… a lot at times 🙂 But spendings are more about buying experiences and less about buying gadgets and other stuff. It might sound boring, but that is how both of us operate. We generally don’t buy things that we won’t value after a few months. We also don’t want to save everything and wait till we are old. It just doesn’t make sense to us. To sum it up, we try to balance our expenditures and investments, to get the best of both the worlds. So spending a lot is not much of a problem for us.

That is about my wife and me.

I am sure many people would be having a tough time explaining the benefits of investing to their spouse.

The following image clearly shows what I am trying to say:

convince spouse investing

Now I am assuming that YOU are fully convinced that for most people, investing (in good mutual funds) is the best option. This is assuming that you understand the risks and have the appetite to digest temporary fluctuations.

But what about your spouse?

The first thing for you to accept is that your spouse might be operating from a very different set of money beliefs than you. So even though you cannot force your beliefs on your spouse, what you can do is try convincing him/her to understand the benefits of your belief.

But before you do so, you need to be sure. Sure that you are right and your spouse is not. Because in reality, it can be the other way around, without you realizing it. 😉

My personal belief is that for common people, the most important thing to understand is the impact of inflation and how it erodes their future purchasing power, despite regular increases in income. Other important concepts like time value of money, compounding, etc. can only be realistically demonstrated when one clearly understands how his or her purchasing power is affected and what one can do to protect it.

So the next important thing, which needs convincing about is the impact of inflation. You need to convince that Rs 100 today is only worth say Rs 95 after a year – because of inflation.

How do you do it?

Its tough but you can choose examples of items, which are of everyday-use for your spouse. So if something that he/she uses daily, cost Rs 50 in 2011 and now costs Rs 80, then that is real-world inflation for them.

You can repeat this exercise with other costlier items too. If your spouse loves travelling, then you can use that as an example.

Now comes the tricky part.

Ask your spouse to imagine a scenario where both of you are not earning, living off a small corpus that you have saved over the years and more importantly, when the costs of all necessary items have risen way beyond your expectations. As for your dream vacations etc., those are beyond your financial capabilities’ then.

And if possible, be a little dramatic about it. 🙂

It helps, I swear.

Now tell them that if they don’t start thinking about investing soon, then you both’s retirement might look similar.

The idea is to push the discussion from a general one to one that touches the borders of fear. It can help reinforce the concept of the need for investing.

Once the realization occurs, it will become clear that keeping money in safe options like FD won’t be of much help (but you need to show that FD paying 5% after tax, cannot negate the effects of a 7% inflation). Your spouse will also understand that prices going up over time, putting money only in safe products or may not cover the same expenses in future.

The whole idea of having such a discussion is to prove that to have enough money for preserving the desired future lifestyle, investing (in better return-giving products), is the only option. Infact, putting money in FDs is akin to being ‘Guaranteed Losers’. Though it is still better than not saving anything at all.

You can also take help of the older generation – maybe your parents or your spouse’s parents.

Elders are real treasures of experience and they can help you convince your spouse about the importance of understanding inflation, saving and investing.

Here is a tip… ask them about price rise in the cost of medicines and healthcare. And make sure your spouse is there to listen to their experiences. I am telling you that not just your spouse, but you yourself will be shocked to hear what they tell.

It is also possible that your spouse might not be interested in touching the so-called risky products like equity mutual funds. This fear may be borne from past experience of him/her or family members losing money by investing in stocks. It is your responsibility then to explain the difference between speculating with shares of a single company as opposed to investing in a diversified group of hundreds of companies (i.e. mutual funds).

Now a very important thing to understand here is that whenever you have this discussion, never speak as an authority on investing or money. The discussion should be more about how you as a couple will be managing your money so that you can maintain or upgrade your lifestyle in future and also, when you are retired and not earning.

You need to show that you are thinking about your combined future, and are not just pushing maths in your spouse’s face.

Return percentages, tenures and other mathematical stuff should be used sparingly in such discussions.

You are also not there to prove your spouse wrong.

Read the above statement again.

You are there to put both your finances in order to better enjoy your life in future. If you’re constantly telling your spouse to spend less, then you also know that it won’t work. You need to convince them about the real-life benefits of investing rather than focusing on reducing expenses.

Once the benefits are clearly understood, expenses will automatically start coming down to free-up funds for investing for better future benefits. And proper investing in line with well-thought-out asset allocation can help you achieve your financial goals.

(Read how to set your real financial goals and use goal-based financial planning to achieve them with higher certainty).

This reminds me of a few words by Seth Godin which I also covered in the post 40 Words To Question Your Notions About Long Term:

What are you willing to give up today in exchange for something better tomorrow? Next week? In 10 years?

Your long-term is not (just) the sum of your short terms.

Try using these lines too, if necessary. Might help. 🙂

I had this bad habit of sharing fun facts about investing with my wife – like how investment in one stock went from Rs 10,000 to Rs 400+ crores and how one man lost an opportunity to make Rs 700 crores because he sold his shares too soon. Another one I remember is that it’s possible to retire much before the age of 60… if one is ready to begin investing just Rs 15,000 per month or Rs 20,000 a month starting from a young age. Read this case study and you will clearly understand why.

But now I don’t need to convince her anymore. Rather it’s the other way around. In fact, when the Sensex fell by more than 1500 points in one day, it was my wife who was asking whether I bought stocks or not and whether I needed more funds to buy stocks.

I literally had tears in my eyes that day. 🙂

Now that’s enough from me. But I leave you with another interesting strategy. Here is it….

A Cheat To Actually Do it

I read about this approach somewhere online and found it worth sharing. No credits to me here…

Take Your Spouse on a Retirement Dream Date

…I have found that when you define your dream retirement, you’re much more motivated to work for it. Abstract dreams are too foggy, too intangible to stick with you, while you wait 30+ years for the payoff.

So how do you go about dreaming the right way? First of all, married couples must dream about retirement together. There’s often a disconnect between couples on this topic because they’ve never talked about it before…

…So set up a date night where you and your spouse will talk about nothing but your retirement dreams. Put everything on the table. In this conversation, you’re not concerned with how much you do or do not have saved for retirement. You’re focused only on building a clear picture of what you want your future to look like…

Sounds interesting and do-able as a first step. Right?

Now once you are done with your retirement dream date, you can do the maths and tell your spouse about how much you both need to invest on a monthly basis to realize your dream retirement together. Also, tell them that it’s possible to retire much before the age of 60. That will get their attention. 🙂

You can also try talking about how compounding works. But I think that should be part of your second retirement date after you have already convinced them about dreaming of a beautiful retirement and also about how inflation can screw it up.

1 comment

  1. Hi Dev..Hope all is going well for you.. one quick question on HDFC TOP 200..i have been in this fund from 2011.Considering the performance , do you think I should exit ? Pls suggest..

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