If you’re the one managing the finances, tracking the expenses and mapping out your family’s financial plan, you deserve a lot of credit. But I’m sure there are times when you wish your spouse was more involved. First, because it takes time to steer the money ship and it’s only fair to share that burden. And second, because it’s nice to know your spouse could take over in case you get run over, or suffer any similar fate.
You’ve worked hard to build a strong financial foundation and credit rating. You want to make sure your spouse doesn’t ruin your finances or trash your credit score regardless of what happens to you. That being said, you might be asking yourself how to handle money talks with your honey.
This is a situation that I’m very familiar with. My wife “allowed” me to do the financial management for years. She didn’t know how to pay the bills online, update the budget, or invest our savings to create retirement income.
This bugged me. I wanted her to be a co-pilot rather than a passenger. This was really important to me, because I know what it’s like to be in a home where the financial decision maker gets taken out of the picture prematurely. Even though my wife was very hesitant at first, we’ve made a ton of progress. We’re not there yet, but well on the way. Here’s what happened:
1. I cried like a schoolboy
I got this idea from George Costanza (Seinfield). He wanted to get his fiancÃ© to do something she didn’t want to do (delay the wedding) so he started crying – and it worked. I figured that if George can do it so can I.
I didn’t really cry, but I did tell her how important it was to me that she be able to run the family’s financial affairs. I really opened up and told her my feelings. By doing so, she recognized that I wasn’t trying to control her. I was genuinely interested in making sure the family would be taken care of in case of unforeseen emergencies. When she understood that, she become more willing to take an active part.
2. We started slow
I was on my own financially when I was 17. I have a degree in accounting, and I have been a professional financial advisor for more than 25 years. In other words, I have a lot of knowledge and experience. I couldn’t expect her to step into the role of financial manager overnight. I introduced one hurdle at a time. I didn’t move on until she was comfortable with a given step.
3. We developed a plan
I created a detailed financial plan that really has two parts. The first part of the plan is a retirement projection. What we’ll have 10 and 15 years from now based on certain assumptions.
The assumptions include a savings goal. I’ve explained that we must hit our annual savings number in order to reach our ultimate retirement dream. Seeing this plan really helped my wife view spending money completely differently. She has never been a spend thrift but none-the-less, seeing the big picture really put spending in perspective.
The second part of the plan is really an emergency continuity plan. What to do if…
That includes a detailed discussion of life insurance, spending, savings, social security spousal benefits, college funding, trusts, wills, etc. I created a list of what to do and when to do it. I included who to contact, who to ask to step in as financial planner, and a general discussion of what assets we have and how to use those assets to replace my income.
As you can imagine, these two sections cover a lot of material. It’s a reference that we’ll have to revisit many times. Each time we do, she’ll get a better understanding of the entire picture and how each of the moving parts works.
4. I handed the budgeting over
I went over how to use the software to track our spending. Then, I asked my wife to be in charge of updating the budget each month. She’s been doing a fantastic job at it. An unforeseen benefit is that by her being so involved with the budget, it’s impacted how she views spending.
5. Entering uncharted territory
There are areas we have yet to work on, and that’s okay. As time goes on, we’ll get there. As new issues come up, we discuss them. The main point is that finances are no longer a mystery to my wife. That empowers both of us.
Is your spouse up to speed? Could he or she take over managing the finances at home? Are you anxious about turning over the reigns?