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Don't Keep it to Yourself

I recently received a call from an elderly woman. 

Me:  Hello, how can I help you?

Woman:  I have a bill from the NYC Finance Department for $22,000.  What should I do with it?  Should I send it to you?

Me:  What is the bill for?

Woman:  I don’t know.  My husband passed away earlier this year.  He handled all of the finances.  I don’t know if I have to pay this money.  What should I do?

I am not the person who sent her the bill (I do not work for NYC finance).  I can guess what the bill is for, but I was certainly not the person to ask.  This woman had no idea who she should have been speaking to and ended up being shuffled from one person to another in an attempt to understand her situation.

Unfortunately, this is not uncommon.  One spouse usually handles the finances.  He or she pays the mortgage, balances the check book and manages the investments.  The other spouse has no idea what they couples net worth is, has no idea if they are on the right track to retirement and as illustrated above, doesn’t even understand the paper work that is arriving at the house. 

It is not the worst thing for one spouse to take the wheel when it comes to finances, but the other spouse should not be left in the dark.  Here are some basic rules to follow:

  • Each spouse should understand the status quo.  If there is a mortgage, what kind of mortgage is it?  Is it a fixed rate?  Is it an adjustable rate?  How much is owed?  Are the insurance and tax payments included in the monthly payments?  I suspect that the NYC finance bill the elderly woman received was her yearly tax payment for her home.  Each spouse should have an idea of how much money is held in banks accounts, mutual funds, stocks, bonds and how much money is owed on credit cards, the mortgage and other loans. 
  • In addition to knowing how much is owed, each spouse should know where bank accounts and investments are held and what credit cards are held by each spouse.  What kind of insurance policies do you have and which insurers are they held with?  This can be easily dealt with if the spouse who is the primary financial handler keeps organized files that are easily found and understood.  If you handle the finances in your home, do not use a convoluted system to track your finances.
  • Each spouse should know where to get help.  Even if one spouse does not know all of the details of how much is going in or coming out, he or she should know who to call.  If there is a financial planner, an accountant or any other financial professional, each spouse should know who that person is and should be able to easily get in touch with that professional. 

All of these suggestions are easily implemented through proper communication.  It’s not necessary to sit down and have in depth discussions about finances on a weekly basis.  Sit down once a year and spend a bit of time reviewing basic information and any changes.  If a major change occurs during the year, briefly discuss that information and then file it away.  If a tragedy occurs, minimize the pay and suffering of your spouse by making sure everyone is in the loop.

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