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Question of the Day – Spouses and Money
By JLP | November 1, 2006
I got the idea for this question of the day from a long-time reader who happens to be a college professor:
Wow! That’s a tough question! Fortunately, my wife and I do not have this problem.
My guess is that if a spouse isn’t interested in personal finance, there’s not a lot that can be done to change it. BUT, that doesn’t mean that they shouldn’t have an understanding of the household finances. For instance, both spouses should have a full understanding of:
- the household budget
- savings goals and where the savings account is held
- retirement goals and where the retirement funds are held (401(k), IRAs, etc.)
- the location of where all the household financial information is kept (desk drawer, computer files, safe, safe deposit box)
- account numbers and contact names and phone numbers for insurance agent, broker, human resources manager, 401(k) adminstrator, credit card companies, bank accounts, mortgage holder, real estate agent, etc.
I think it is important for the uninterested spouse to at least know and understand the basics of the household financial plan. Maybe by showing them what you have accomplished together will motivate them to learn more.
Now, what are your thoughts and suggestions?
Topics: Question of the Day | 12 Comments »
November 1st, 2006 at 1:05 pm
Unfortunately, I’m in a similar boat with my hubby. Thankfully, he’s not a “spender” and is actually quite thrifty. However, when it comes to planning budgets and investments, he’s totally disinterested. I try to make sure we are on the same page with all our goals, and communicate the reasons for our budget to him. He’s perfectly happy for me to make all the big-picture decisions… Oh well – it’s been working for us thus far!
November 1st, 2006 at 1:58 pm
I try to go over our balances with my wife about once a week or every other week, just so she knows where we are. I also let her know what bills and expenses we have coming up. She is thrifty by clipping coupons, waiting for sales, and not spending a lot of money on ‘nice to have’ purchases. I try to explain the goals I’ve set and allow her to make some decisions to get her on board with them.
November 1st, 2006 at 2:02 pm
I’ve been in both situations. In a previous marriage my wife didn’t care about the finances. My wife now, does.
I can clearly say this:
“If your spouse doesn’t care about the finances or doesn’t share your goals, you’re in for a long hard journey.”
It will be very very difficult for you achieve hardly any goals without a supportive spouse.
Probably not what people wanted to hear, but that’s what I’ve found out.
- Bryan
http://www.BryanCFleming.com
November 1st, 2006 at 2:02 pm
You could ask this other spouse “How would you organize our finances, take care of children, outstanding debts, etc. if I was killed in a car wreck tomorrow morning?” Both spouses need to be on the same page and at least share some basic goals. This is exactly what happened to one of my brother’s best friends when his wife was killed several years ago. It took him quite a while to get all their finances organized.
You could also discuss how much monthly income you will need during retirement, and how you plan to achieve that goal from where you stand today.
November 1st, 2006 at 2:08 pm
I agree with Michael, you need to at least have the other person know the basics so that if their is a problem they aren’t totally lost.
My fiance is halfway there. She doesn’t care about what’s happening with retirement or any thoughts on investing, but she likes to know what cash we have and how we’re doing on our budget. I don’t know if we’ve fully accepted and are as focused on our goals, but in time I think she’ll figure it out. She at least supports our goals and if she doesn’t want to deal with something, I’m happy to deal with it on my own (like deciding on an IRA or rollover, or taxes).
November 1st, 2006 at 6:31 pm
My boyfriend is pretty uninterested in doing any retirement savings of his own since right now the two careers he is looking at are among the last in America that still come with pensions (FBI agent, college professor) but he understands that it’s important for me and is encouraging about it. If we got married I doubt he’d have much interest in the household finances but frankly he spends so little that it will be relatively easy to meet our goals. He is with me on the idea of separate-and-joint bank accounts, is also a big saver, and doesn’t carry a balance on his credit card. So, for us I don’t think it’s a problem that he has no interest since he keeps his nose so clean – however I need to stay on top of it since I’m the problem child here. =)
November 1st, 2006 at 6:43 pm
Money/finances can trigger a lot of negative emotion for some people, so our approach in dealing with this type of situation is to shift the focus away from the money side of things and onto the couple’s lives (goals, dreams, aspirations, etc.). Money then becomes a means to a (clearly defined and hopefully aligned) end goal(s). Our Financial DNA approach also assists people understand and accept their different ways of communicating, approaching goal-setting, spending/saving, etc. and this understanding then creates an important platform to address the money issues in the relationship.
Even if the end result is that one of the couple relinquishes control to the other, there will be more buy-in to the overall approach to managing the couple’s finances if these issues have been addressed openly.
http://www.financialdna.com
November 1st, 2006 at 7:31 pm
I’m the main finance person in our house, but my wife and I talk deeply about long-term goals – and I make sure I back up our spreadsheets and such on her computer and that she knows where they are so she can look at them. Once a month or so, we have a “treasury report” where we go over the net worth statement to see how we did that month. Also, she’s self-employed and I’m her bookkeeper
We’re not big budgeters, at least not in the “hey, we spent $6 on eggs last month and $7 this month, what happened?” fashion, but we aren’t big spenders either. Our approach to budgeting is to figure out how much we want to save in a year, divide it by 12, and if we don’t save enough in a month, figure out why. We also save all her self-employed income that doesn’t go to taxes – and savings on her income doesn’t count against our monthly savings goals since it’s highly irregular.
All our accounts are joint, so there’s little chance for “leaks”.
November 1st, 2006 at 10:46 pm
I have found over the years that if you gradually include your spouse in more and more of the financial matters you can start to educate them on what is happening.
Additionally I think it is also critical to ask some specific questions to help your spose start to understand what you are concerned about financially. For example:
1. When do you want to retire?
2. How much money to you think we will need to retire?
3. What do you want to do after the kids move out?
4. Should we consider getting life insurance for you?
5. Shoud we set a budget for Christmas, our next vacation, etc.
Also I have started to take my wife to some of the meetings with our financial planner. This also helps educate her and expose her to terms and ideas that she may not have heard of before.
November 1st, 2006 at 10:59 pm
My professional experience is that one spouse almost always takes the lead with finances and the other just goes along for the ride. It’s not a bad thing, it works well for many families.
November 2nd, 2006 at 7:09 am
I think my spouse sometimes WISHES she weren’t involved in managing our finances, but most times she seems glad she is is and sees the value in it.
To me, the issue is important enough to sit your spouse down and say, “Hey, we need to get on the same page in this area if we want to give this marriage the best chance of long-term success.” (Maybe not in those exact words, which sound a little stiff and formal to me.) Discuss why he or she is so against getting involved…the issue might not be money itself, but possibly something deeper. He doesn’t like feeling controlled by a budget, or she’s afraid of finding out youare just a car wreck away from being broke, like her parents were when she was growing up. We can’t change our spouse…only they can…but we can talk things out and maybe help them see what’s REALLY going on.
November 2nd, 2006 at 9:04 am
My wife and I are on the same page with regard to saving and spending, but she has little interest in the minutia of how and where our assets are invested. I keep her up to date with my deals and strategies and she knows where all of the information is located, but just isn’t interested in doing more.
One resource that is a good starting point for documenting your financial picture is the Financial Preparation Kit document from Patelco Credit Union. I think it’s a useful guide for getting your personal financial information organized.