{"id":14645,"date":"2019-09-24T16:10:47","date_gmt":"2019-09-24T06:10:47","guid":{"rendered":"https:\/\/www.prosolution.com.au\/?p=14645"},"modified":"2019-09-24T16:11:13","modified_gmt":"2019-09-24T06:11:13","slug":"does-your-spouse-understand","status":"publish","type":"post","link":"https:\/\/wealthcoach.com.au\/stage\/does-your-spouse-understand\/","title":{"rendered":"Does you partner understand your finances?"},"content":{"rendered":"

\"financial<\/p>\n

In my experience, it is common for one spouse to have a greater interest in the family\u2019s finances. In fact, the spouse that is \u2018most interested\u2019 typically takes fully responsibility for making the family\u2019s financial decisions. However, there are some fundamental and important flaws with this approach which I\u2019d like to share with you.<\/p>\n

What happens if one spouse unexpectantly passes away?<\/h3>\n

If the spouse that is the \u2018financial decision-maker\u201d passes away, particularly if it\u2019s unexpected, it does cause the surviving spouse a lot of stress and worry. Not only do they (probably) have little knowledge of their financial affairs, but they also typically have a low level of confidence and experience with making financial decisions. This all compounds to create a lot of stress and worry, at the worst possible time.<\/p>\n

To avoid this occurrence, each spouse must understand their financial position and strategy, even if its only at a basic level. They also must know who to seek advice from and who to trust, so they are able to share the burden of making ongoing financial decisions.<\/p>\n

If the relationship breaks down beware of skeletons<\/h3>\n

There have been some horrible situations of spouses finding out about how dire their family\u2019s financial situation is after their relationship has broken down. This includes massive tax debts, liabilities and so on. Of course, a strong relationship is founded on mutual trust and respect which includes discussing and disclosing all material financial decisions with your spouse before any transactions are made. Unfortunately, this does not always occur.<\/p>\n

One spouse, often men, may feel a strong sense of responsibility to \u201cprovide\u201d for their family. Sometimes, this responsibility can unfortunately drive them to make unsound and inappropriate financial decisions. And to compound this, they might avoid discussing these decisions with their spouse, so they don\u2019t \u2018burden\u2019 them.<\/p>\n

Of course, this is a foolish approach. That said, I believe it is the responsibility of each spouse to ask questions and seek to understand their own financial position. Nothing is too complex to explain in simple, easy-to-understand terms. It is something you can share together.<\/p>\n

It\u2019s your money, so it\u2019s your responsibility<\/h3>\n

There is one thing you cannot delegate and that is the obligation to take responsibility for your money. It is your money and its your job to be responsible for it, not anyone else\u2019s. That is not to say that you cannot trust anyone else or take their advice. But you must make sure that know what\u2019s going on i.e. where its invested, what risk you are taking, how much you spend and so on.<\/p>\n

If you don\u2019t take responsibility and you end up losing money one day, you only have one person to blame.<\/p>\n

Therefore, be engaged in the topic of money. Ask questions. You don\u2019t need to have to understand the nitty-gritty or feign competency, but you must take responsibility. If you have a financial advisor, attend at least one meeting every couple of years. If you don\u2019t have a financial advisor, ask your spouse to explain what\u2019s going on and what your family\u2019s financial plans involve.<\/p>\n

You have to be on the same page<\/h3>\n

One of the important advantages of ensuring that both partners are engaged in understanding their finances is that you will be more likely to stick to the plan.<\/p>\n

For example, if your financial plan requires you to contribute say $20,000 per year into a share portfolio, and both spouses understand why this is important to maintain, then it is likely that you will hold each-other accountable for achieving it. However, if one spouse doesn\u2019t understand the strategy and therefore the importance of sticking to the $20,000 budget, then it can be more difficult to encourage them to curtail other expenditure. Therefore, there is merit in making sure each spouse \u201cbuys into\u201d the plan and commits to it.<\/p>\n

What if you\u2019re the only interested party?<\/h3>\n

If you are reading this blog, then its likely that you are the person in charge of your family\u2019s finances. You might be thinking: how do I get my spouse interested in our finances? Here are a few suggestions. Ask them to:<\/p>\n