In many relationships the division of labor often falls along the lines of which partner has a greater interest in whatever the underlying duty might be. Traditionally, women have been more likely to do the cooking. But these days it’s not uncommon to find that in many couples it’s the men with the culinary inclination who serves as chef. Either way, whoever wears the apron assumes the responsibility, allowing the other spouse to focus on other responsibilities.
Financial duties are often divided up in this way. The partner who’s more of a “numbers person” pays the bills, manages the budget, and tracks their retirement nest egg. The other spouse, who may have less of an aptitude for finance, is happy not to have to get too involved in the details.
According to a study by UBS Global Wealth Management, 54% of surveyed women said their partner takes the lead in making “major financial decisions.” Among the reasons they gave for this, 88% said, “I think my partner knows more than I do.” And 76% said, “I’m not interested in planning and investing.”
But even if the couple agrees that one of them should be exclusively in charge of finances, it’s still not a good idea to completely exclude the other person.
Here are three reasons why:
1. Illness or death. If something should happen to the only partner who knows how the household finances work, it creates a crisis. The healthy or surviving partner is suddenly thrust into a role for which they have no preparation. And they may not be able to find such basic information as the locations of cash or investments and the credentials needed to access it.
2. It takes two to succeed. It’s difficult to achieve long-term financial goals such as successfully saving for retirement if only one partner is actively engaged. This is especially true if one spouse is more interested in enjoying money now instead of systematically saving it for the future. If both partners are actively engaged in their finances, they can discuss options to find a happy medium between the two extreme thought processes.
3. A second opinion. Just because a spouse might be interested in money does not automatically mean that they will make good decisions with it. Their idea of investing might involve activities with extremely high risk, such as commodities speculation. This could lead to huge losses to their savings that the other spouse would not be comfortable with. When it comes to something as significant and long-term as investing for retirement, both spouses should fully understand what’s being done with their money.
This doesn’t mean that both partners in a couple are required to split financial duties 50/50. But both partners should know what they own, where their investments are, how much life insurance they have, and how to access their financial assets.
At Domani Wealth, we’re happy to talk with you about easy ways to keep both partners in the loop and come up with a plan for what to do in the case of illness or death. We can also help you determine various strategies to save for your financial goals that you both are comfortable with as well as provide financial check-ins to make sure you’re on track with your saving vs. spending. Get in touch with us anytime at [email protected], calling 855-855-5455 or checking out our team members to contact directly!