Do You Know Enough About Your Family Finances?

Carrie Schwab Pomerantz
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Posted: Feb 13, 2014 12:01 AM
(SET ITAL) Dear Carrie: My husband has always handled our finances, and I've been OK with that for the most part. But now I feel I should be more involved. What if something happens to him? He tells me not to worry, that he has things under control. I'm no longer comfortable with that. What do you think is important for me to know -- and how can I get him to include me? -- A Reader (END ITAL)

Dear Reader: In every couple, there's usually one person who takes the financial lead, and that makes sense. We all have our own talents and interests, and handling finances may come more naturally to one person than the other.

But I agree that, even if your husband is handling the details, it's essential you also have complete knowledge of your family's financial matters -- both large and small. Keeping you in the loop is not only essential -- to me, it's a sign of respect. And hopefully, your husband won't interpret your interest as a threat or vote of no confidence, but more like making sure you have each other's backs.

In my own family, I'm more the day-to-day person, but my husband is aware of every account and is part of every important decision. You might use this as a model when you approach your husband with your concerns.

BE CLEAR ABOUT YOUR INTEREST -- AND YOUR PURPOSE

Because you've been content in the past to let your husband take the financial lead, it's possible he will see your new interest as somehow questioning the way he's been handling things.

Make sure he understands that you're not doubting his ability or asking him to give up control. You're just asking to be a partner in a very important part of your life together -- for the well-being of both of you.

PUT IT IN THE CONTEXT OF YOUR MUTUAL GOALS

One easy way to start the money conversation is to talk about your plans for the future. What do you each want to accomplish? Where do you want to travel? What's your retirement scenario?

This isn't just about money; it's about your dreams. But it does take money and a certain amount of financial planning to achieve them. Talking about your life goals could be a good way to open the door to your greater personal involvement in helping to plan and save for them.

SHOW HIM YOU'RE SERIOUS BY ASKING THESE QUESTIONS

To plan and save wisely, you need to understand what you have, what you owe, and how you're protecting yourselves. Your husband may initially feel that it's too much of an effort to explain everything, so make it easier for him by having a concise list of questions.

Start by asking about your:

--Net worth. This is a look at what you own (home equity, investment accounts, retirement savings) minus what you owe (mortgage, outstanding credit lines, car loans, credit card balances). Are you in the plus?

--Monthly cash flow. How much money comes in each month, and how much goes out? Is there a deficit or surplus? Could you save more?

--Insurance coverage. What type of health, life, homeowners and automobile insurance do you have? Are you adequately covered? Are these private policies or sponsored by an employer?

--Retirement savings. How much are you saving each year? Do you know how much you need? Are you on target?

--Employee benefits. Does your husband have outstanding employee stock options or restricted stock? Does he have accrued vacation or sick pay?

--Estate plan. Do your wills and trusts reflect your current wishes? Are your beneficiary designations up-to-date, and do you have the appropriate powers of attorney in place for both health and financial matters?

Showing that you have a basic understanding of what you should know may make your husband more willing to discuss your overall finances. He may even be pleased to demonstrate how he's set everything up.

DIG A LITTLE DEEPER INTO THE DETAILS

Having the big picture is important, but if something should happen to your husband, it's equally important -- if not more so -- to know where your money is and who to turn to for help and advice. I suggest creating a few lists to help you find this information quickly.

These would include:

--Advisers. Contact information for your financial adviser, tax accountant, attorney, insurance agent or any other advisers. Suggest setting up an introductory meeting if you haven't yet met these people.

--Accounts. All your investment and bank accounts, with account numbers, locations and how much is in each. If these accounts are handled online, you should also have a list of online IDs and passwords.

--Documents. Where to find important documents -- in other words, loan papers, wills, trusts and insurance policies.

If your husband also handles paying the everyday bills, perhaps you could suggest setting up automatic payments if he hasn't already done so. That way, neither of you has to worry about them.

KEEP TALKING

Once you're both more comfortable talking about your finances, keep the conversation going. Continue to ask questions and let him know you want to be a teammate in all major financial decisions. Your husband may find that rather than being a chore or a threat, sharing financial challenges and responsibilities -- and respecting each other's input -- gives you both a greater sense of security.

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of the forthcoming book, "The Charles Schwab Guide to Finances After Fifty, available in bookstores in April 2014. You can e-mail Carrie at askcarrie@schwab.com." This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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