Often when I’m working with women going through a divorce, they feel some amount of shame about how little they know about the investment and financial decisions in the household. Because women tend to be slower to act in any situation where they don’t feel empowered or well educated, it’s common that men (who need significantly less info to act) end up taking on the responsibility.
And although there’s no ‘right’ or ‘wrong’ way to manage money between a couple, it’s ideal that you both know how things work and what the overall plan is, even if some of the execution is left to the person who’s more interested or more educated on the topic.
What if you’re the Non-CFO Spouse and you want to learn more about how the family finances work beyond just paying the day-to-day bills?
There are tons of articles online about what to ask your partner or potential partner about money when you’re dating, but what about if you’re married or in a long-term committed relationship?
Money is one of the #1 reasons couples break up or marriages divorce. So how do you broach the topic if you’ve found yourself in a situation where your spouse is managing all the household finances and you’re just along for the ride?
When & How to Ask
Like insurance, it’s great to ask for it when you don’t need it. Said another way, relationships have ebbs & flows, highs and lows, ask on a high.
It’s Spring-Cleaning season. Now’s a great time to clean out financial documents (boxes) files, piles, etc. It would be a great time to digitize your financial life, scan, and get rid of all the old documents you don’t need to keep on hand.
Ask your spouse if they’d be interested in a project to pull all your estate planning/financial docs in one place. I do an exercise like this with clients to create a binder (physical or digital) called a Financial Life Organizer that has a copy of all their essential financial docs in it. Use this opportunity to get a better understanding of what you have.
Once you have all the docs out, make 3 piles.
1. Debts (things you owe)
2. Assets (things you own)
3. Risk (Estate documents, insurance, etc)
Don’t Ask About Money
· When you’re angry or in a fight, especially if the fight is about money.
· When someone threatens divorce (if you can help it)
· As a threat
Ask because you just want to be included in the relationship and, if you’re like me, you know that having a plan for something, somehow makes that thing less likely to happen. Ever notice nothing bad happens when you have an emergency fund but when one bad thing happens, a bunch of other bad things happens all at once?
Getting on the same page about finances is a great way to build trust, squash unspoken fears, and reinforce a relationship.
What to Ask
Another great way to get started is just to share passwords and review accounts. I use a password-sharing software called LastPass. It pre-fills my passwords but also allows me to give access to my user info to a partner without even sharing the data, they just get a link that allows them to log into my account and the user ID and password are pre-filled.
1. Where’s our money? If your partner wants to share just Login Credentials to your Financial Accounts, logging in yourself and reviewing the statements is a great start. You can establish a few things this way:
- What kind of accounts do you have?
- What companies are they with?
- Account balances?
- What the underlying investment (what is your money invested in) or performance is of these accounts?
- Who are the account beneficiaries?
- Who the contact person is, Advisor, Agent, Customer Service, etc.
2. What’s our Financial Plan? This is a big question and most people, honestly, just don’t have one if they’re not working with a Financial Advisor. If they do, ask them to share it with you. Then prepare yourself for an excel spreadsheet 🙃
Perhaps there’s a tool they use to manage the household finances? My clients use a Personal Finance & Planning software called RightCapital, which allows me to collaborate with them to build plans. Maybe your significant other uses Mint.com or Personal Capital to monitor plans.
3. Let’s set up a meeting with our Financial Pro. This is less of a question, but if your family employs a Financial Planner, you should schedule a call with him or her to have them review the plan with you. Just tell your partner you’d like to be more engaged and present in the financial conversations. Financial Planners would love to have a meeting with you. There are literal webinars where Financial Advisors (usually men) talk about how to get the non-CFO spouse involved in the conversation. If you don’t feel like both of your needs are being met by the financial planner relationship, consider making a change. This is too important a topic to defer to someone just because they’re an old golf buddy.
When you get the meeting. Ask the questions. No matter how small. And if they don’t answer them well, talk down to you, or belittle you. Make a change.
When it comes to being involved with the Household money, by all means, just ask. Asking doesn’t mean you have to take it over, just ask to be included. Ask follow-up questions. Do some research on your own (I am a big fan of www.Investopedia.com).
Make sure your partner understands that this is a way that they can help make you feel more cared for and included in your relationship. Male or female, your partner likely wants you to feel more involved and empowered in your relationship. Give yourself the gift of asking about these very important topics.
Kristin Afelumo is the LPL Financial Planner & Owner of HerPlanning. In her web-based Financial Planning practice, she focuses her efforts on Female Primary Income Earners and women who are the money managers of their households. She’s passionate about helping her clients achieve greatness. Her mission is to support clients in the area of Financial Planning so they can be great where it matters, without apology.
Photo by Mikhail Nilov: https://www.pexels.com/photo/a-couple-sitting-together-on-the-sofa-7735701/