Women & Finance: You Have to Have Your Own Money Skills

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I was speaking to a woman about money and monitoring expenses when she admitted that she “just let’s her husband handle everything.” When she said everything she meant everything. She had no idea what accounts they had or at which institutions they had them. She of course didn’t have the passwords to any accounts. She didn’t pay the bills and trusted and expected him to alert her if there was anything she really needed to know. I was shocked. Was this really happening in this day and age?

 

Apparently the number of women who handle the household finances went to 24 percent in 2013 according to Fidelity Investments. Wow only 24 percent. It’s better than it was but is still so low. Women were not as confident about their ability to handle the finances especially not investing and long-term financial planning.  This is especially troublesome since women are still outliving men. Between the 40-50 percent divorce rate and the fact that the life expectancy for women is longer than for men, at some point women will have to be fully in charge of the finances.

 

Even if you allow your spouse to have full control of the finances at least be well versed in what the household financial situation is. Both spouses should have a vested interest in the financial security of the household. Here are some ways and rules to come together over the finances:

 

1) The information for any shared household accounts should be known to both parties. Information such as the institution, account number, and account password.  Notice I shared accounts. If you subscribe to the ideology of a separate account for each and a joint account … hey that’s fine. As long as both parties agree and are honest.

 

2) Design the budget together. This way it’s clear to both parties where the money is going and why. Miscommunication here can lead to differing expectations on spending. If one person is unclear on the actual budget for a specific category then it will be much easier to overspend. Overspending in one category causes you to have to make up for it somehow, usually at the expense of your financial goals.

 

3) Have monthly finance meetings. Schedule the time on your calendars to sit down and check in on the financial plan and with each other. How well did you stay within the spending plan aka your budget? What needs to be tweaked for next month? How much progress did you make towards your goals? Make sure everyone is on the same page. It doesn’t have to be long, it’s a check in.

 

Guys, don’t think you’re saving her the trouble or the worry. Include her in the conversation and updates on the money. Women take an interest and do what you need to do to be more confident about financial decisions.

 

Grow your financial confidence:

1) Read (well continue reading since you’re here) financial blogs and books. There’s a lot of great information out there. Start reading and gathering the knowledge necessary to be an engaged participant in building your financial security.

 

2) Exercise your growing financial muscle. Go beyond the budgeting and household expenses. Have discussions about the long-term financial planning. Make sure you understand what the plan is for your financial security. Know how you will be able to survive and run your household during retirement. Talk about the retirement goal. Know the nest egg number and how close you are to it. Know the plan of how you will reach that number. Talk about the investment vehicles being used.

 

3) Attend the meetings or conversations with the financial advisor. Both spouses should be comfortable with this person. If either don’t feel comfortable talking to the financial advisor then it may be time to make a switch. This person is handling your money and investments, you should be comfortable asking any question about your money. No matter how silly you may think the question is! You should be able to ask “hey does money grow on trees?” and get a thought answer that doesn’t make you uncomfortable. You can then say you were just joking.

 

Both spouses should be involved in the financial security of the household. However, each person should have money management skills of their own.

 

Photo credit: The Urban Scot

About Dr. Maria James

Dr. James, The Money Scientist, has expertise with designing income management, debt management, and wealth strategies to help you live your best life. She is the founder of Pocket of Money, LLC and the creator of The Wealth Protocol™. Dr. James has also been a guest financial expert on ESSENCE, WEAA, Madame Noire and more.

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