The Danger When Spouses Divide The Financial Responsibility

By: Bryan D. Beatty, CFP®, AIF®

How Couples Can Successfully Manage Their Finances: For Richer or Poorer!

My parents grew up in the generation where a great deal of mothers stayed home and raised the children and managed the household. My father worked for 45 years as a letter carrier and odd jobs for extra money along the way. It worked. They raised 4 children in a very small townhouse in Dundalk, MD in the 70’s and 80’s.

My mother kept the books, so to speak, and managed household purchases i.e. groceries, holiday gifts birthday gifts etc. She paid the bills and managed the finances and my dad worked. That was the way it worked for them. It was very common for families growing up then to have divided responsibility.

Now even though they have a son that is a financial advisor and I helped them along the way with planning the small amount of investments they were able to save, my mother was private and stubborn about many things. I am sure that many of you can empathize with regard to your own family dynamics. They had an estate plan. They had insurance. But there was one thing for which they were not ready.

My mother passed away January 10, 2017, from a heart failure. She was only 68. No one expected it. We were emotionally devastated. Just before my mother actually passed following the initial heart attack she said to my younger sister, “You have to get your older sister here from Florida. She knows how I do things and where things are. Your father will have no idea what to do if I am gone.”

Snap! All of the sudden it hit me. Why hadn’t my father taken the time to get involved in the finances? Why hadn’t we or more specifically, I, encouraged him in anticipation that Mom could die before him. Partly it was family dynamics that kept me from pushing, but perhaps I could have tried harder.

I encourage all my clients to do financial planning together and to both understand where things are and what the plan is. And as I tell them why I never truly understood how important it was until that day.

We were in her study and craft room where she painted and stitched (she was quite talented) and looked over all the sticky notes on the desk and filing cabinets. There was a pile of opened and unopened mail and the bookkeeping manual with handwritten entries for the last several years of payments to credit card companies and utility companies. Some of the bills were on auto-pay and she wrote checks for others. There were credit cards that were in paperless statements. There were credit cards in her drawer that we weren’t sure if she used. I didn’t know it but my mother had made me the executor of the estate. So, it was my duty to figure all of this out, and my siblings helped out tremendously.

I have now set the family up with our personal dashboard and connected all the accounts, and we are providing affiliate access to one sister to help look over the finances. We put all the essential bills on auto pay for my dad and winnowed down to only a couple of credit cards. There is still work to do but things are ok.

I wonder how more difficult this would have been if there were acrimony among the kids and no son that is a financial advisor or there wasn’t insurance and wills. More than anything there has to be an organized knowledge of the household. We are still recovering online access to all the accounts.

If you haven’t thought about this in terms of how you could be better prepared you should. We have the tools to make sure that you are prepared for the unexpected. Talk to your advisor today about the EBW Dashboard, and password protection software along with ID theft protection services. Make these tools part of your financial plan.

Now my dad has a complete picture of the household finances and in the event, he starts to diminish in any way we are able to look after him and his financial picture. My older sister is his power of attorney so she will be the affiliate with eyes on his finances. He is so relieved that the bills are on auto pay. We are all surprised at how much he has cut the budget already.

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