By now, you probably don’t need to be reminded that money plays a role in a large percentage of arguments between spouses. Sometimes these arguments are rooted in a lack of communication, clashing values or a power struggle, and sometimes they happen because one spouse is not involved in the daily maintenance of the household finances.
In households where one spouse shoulders all of the financial responsibility, that spouse is typically the husband. It is also common for wives to handle bill paying and shopping while husbands manage the big picture planning, such as retirement accounts, insurance and tax planning. Of course, you should do what works for your marriage and split responsibilities accordingly, but it’s also important that both you and your spouse are financially literate and aware of family finances, even if you don’t personally sign off on the mortgage payment each month.
Why it’s Important
Women are living longer, earning less and spending more time outside of the workplace than men, giving them an even greater need for financial understanding. Death, divorce, disability and other unforeseen circumstances can lead to financial ruin for anyone, man or woman, who is not capable of handling finances. Additionally, financial literacy can bring peace of mind in the following ways: sending your children to college or buying a house.
- Taking control of your money is the best safety net you can have. No one cares more about your money than you do, not even your husband.
- Shirking your responsibilities can leave your husband feeling resentful or cause a power imbalance in your marriage, but talking about money can make your relationship stronger.
To safeguard your future and attain peace of mind, it’s important for you to learn
- Planning for retirement now makes you less likely to worry about money later on.
- Learning about personal finance helps you better understand how your lifestyle is funded and how to afford the lifestyle you want in the future.
- Being deliberate with your spending and saving puts you in control of reaching your future goals, such as about personal finance concepts and make yourself aware of what is happening with your money. You should play a role in any decision-making when it comes to spending, saving and investing.
Talking to Your Husband
To get started, communicate with your husband your intentions to get more involved in financial decision-making. Tell him your concerns and why it would benefit both of you if you were both responsible for financial tasks.
It’s important to develop strong communication skills when talking about your money, because it can be an uncomfortable, emotional topic. Try to understand your husband’s money philosophy, his background experiences with money and his personal financial goals, and make sure he understands yours, too.
To get the discussion rolling, start by talking about the following topics:
- Income: Talk about how much each of you makes, how much you hope to make in the future and whether one of you will stay home with future children.
- Expenses: What are your recurring bills (monthly, quarterly, etc.) and how much can you expect to spend on other necessities? Discuss your priorities, how much you can each spend without consulting the other and what you consider needs versus wants.
- Goals: Make sure you’re on the same page when it comes to short- and longterm goals, and make a plan to reach them.
- Investing: Whoever is more confident with investing terminology should get the other up to speed, so you can speak confidently and agree on a risk tolerance and asset allocation.
When your husband meets with your financial advisor, make sure to attend those meetings, if you aren’t already, and play an active role in the meetings. Ask questions about anything you don’t understand and make sure your opinions are being heard.
Your husband may already have an organizational system that works for him. Ask him to explain it to you, or decide on a system that works for both of you. Your system could be a spreadsheet on your computer, online banking or even a pencil-and-paper ledger. You’ll also need a filing system to organize old bills, insurance policies and other important documents.
You and your husband should both know how to easily access:
- Your birth certificates and marriage certificate
- All bank and brokerage accounts
- Deeds and titles to property
- Insurance policies
- Debts and monthly bills
- Your will, living will, powers of attorney, etc.
You should organize passwords, contact information and important paperwork so either spouse would be able to carry on without the other. You should also know where all of your assets are and how to access them, who owes you money and whom you owe money to. Once you’ve gotten familiar with your own financial state, seek out books, blogs and other sources for more knowledge on the topic of personal finance. Then you can start taking on some responsibilities at home.
- Budget: Look at income and expenses for the past several months and put together a budget with your husband, allocating funds for saving, discretionary spending (fun money) and necessities. Then, track your spending in whatever system you created, and keep an eye on your budget to make sure you don’t overspend.
- Insurance: Read over your current policies and learn all about your coverage – deductibles, copays, premiums, what’s covered, how to collect and how to contact your agent. Do an insurance audit and decide if you have enough or too much coverage, and adjust accordingly.
- Investing: Learn about basic investing vehicles and concepts, and look over your current investments to decide if they are right for your family. Work with your husband to determine an investing plan that can help you meet your goals.
- Estate plan: Make sure you have an updated will and beneficiaries as well as trusts, power of attorney and any other documents you may need. Keep these documents somewhere safe where you could access them if needed. Also, find out which accounts name you as a beneficiary, such as life insurance policies or retirement accounts.
- Credit: If you don’t already have a credit card in your name, sign up for one. Make sure any assets you share with your husband (house, investments, car, etc.) are in both names. Your credit score is not the same as your husband’s, and if everything is in his name only, you may be left with no credit history should a divorce occur.
Financial literacy has often been more of a problem for women, not because they lack the skills or ability to understand finance, but because they historically have been left out of conversations about money. The world is shifting toward equality, and it’s important for your knowledge to keep up with your responsibilities.