I recently read an article about gender equality starting at home. The article discussed many areas for spouses to work on, such as sharing chores, childcare and family social activities, and balancing and supporting each person’s career goals. Surprisingly, one very important topic was not mentioned: managing the family finances.
As a financial planner, I have experienced multiple times when the spouse who manages the finances passes, the surviving spouse is overwhelmed, all while managing their grief. Too often, one spouse handles the finances, sometimes because of interest or experience, the need for control or the lack of interest from the other spouse. Have you ever heard, “Oh, Frank handles our finances. He’s good with that kind of stuff.” Frequently, the other spouse has no idea if he really is.
Spouses do not need to manage finances equally. One person can take the lead, but both should be informed and involved in making decisions. If you work with a financial planner, then at a minimum, both should attend meetings. If you manage your own finances, then you should have regular discussions with each other about your goals, cash flow, saving, risk tolerance and investing strategies, just to name a few.
Sometimes one spouse is just not interested, but both spouses must be aware of the family’s finances. I’ve had clients where one spouse’s risk tolerance may be higher than the other spouse’s which can lead to disagreements when it comes to choosing investments or clients who in retrospect, wish they had paid more attention to the finances, especially if they realized too late that finances were being handled in an aggressive or inappropriate way.
It can also be difficult when people have had previous marriages or when goals and money personalities do not match. First, you may need to determine how you’re going to work together. If you can’t compromise, which can cause tensions in other areas, I suggest working with a counselor/therapist who specializes in working with couples and their finances.
I’ve noticed that younger generations tend to be more equally involved or at least equally informed. Maybe it’s out of interest or maybe it’s the DIY culture that the internet has enabled. It’s never too early to start being more financially informed about your own finances, but there can be a time when it’s too late.
Stay safe and healthy,
Michael Fuhr, CFP®
Evergreen Wealth Services