When only one member of a household runs the financial show, it can lead to trouble. It's vital that both partners be involved and on the same page when it comes to money.
When only one member of a household runs the financial show, the other may feel left out and that he or she has no say in the use of his or her own money. The managing partner may not know what the other really wants nor get the benefit of the partner’s knowledge and feelings — which could be considerable. When only one partner has total control, teamwork and unity suffer and divisiveness and resentment can be bred. Negative feelings can undermine the couple’s relationship. Those feelings can fester, trickle down and infect the rest of the family and their close friends.
When the partner who handles all the family finances also works, it can be a heavy load. As a result, that partner may not devote all the time, focus and energy necessary to do the best job. However, if partners manage the finances together, they can share the load, pick each other up and do a better job.
Furthermore, if the sole financial steward suddenly dies, as they frequently do, the survivor may be totally unprepared to step in. I’ve dealt with survivors who had no knowledge or experience with finances. Some had never written a check. A number were forced to rely on advisors, family, friends, or associates of the deceased who they didn’t like or who didn’t have their best interests at heart. Still others fell victim to devious financial salespeople and advisors — sharks and vultures who prey on hapless survivors.
Let's face it: one of the spouses will eventually die. So planning and working as team is a must. In all probability, both spouses will not die together, and male partners will usually go first. Survivors who have not been involved in their families’ finances can make major financial mistakes, incur unnecessary expenses, or be ripped off.
In relationships, we all take on roles and certain ways of thinking become ingrained. Traditionally, men were the head of their households. As such, they were in charge of their families’ money and made the financial decisions. Since men were the primary earners, they usually paid the bills and handled the savings, investments and future planning. They gave their wives and kids allowances and provided household funds.
In some households, a woman’s involvement in financial matters was considered improper so they received no financial training and were not included in financial discussions. Many husbands were secretive so their wives were left completely in the dark.
When potential new clients make an appointment to see me, I ask it they are married. If they are, I make sure their partner joins them when we meet. Since I will be working with the couple and building their wealth, I think it's essential that I get both partners’ input, involvement and direction.
Not only have women become more involved in their family’s finances, but many have taken charge. I find women are often better at managing their families’ money because they tend to be long-term thinkers, while men usually think more about the short-term. Fewer women are gamblers and prone to taking wild risks.
Financially, women are more grounded and conservative; while they want to make sure all the bills are paid on time, men tend to be more willing to let them slide. Women usually look at the bigger picture: they’re generally more concerned with the welfare of their families and their communities, while many men focus on their stature and their personal needs. I’ve frequently seen that when women get money, they buy food and clothing for their families, while men buy hot cars.
Pay bills together
It’s vital that both partners be on same page about their money issues. They must discuss their finances, set goals, plan, and work together to reach them. When both are involved, they share the burden and motivate each other. They increase their chances of making the most of their money, building wealth and achieving their financial goals. Working together also strengthens their relationship.
Here’s what partners should do:
• Sit together.
• Chose a time and place when there are no distractions.
• Discuss all the family’s bills and pay them.
• Talk about your bills as you pay them.
• Ask if they’re too high.
• If the electric bill was $500 last month, explore how to reduce it.
• Examine how you could cut your food bill.
• Ask if you’re eating out too often, buying the wrong goods or shopping at the wrong places?
• Discuss ways to cut other expenses and increase your savings.
• Review your investments. Talk about how they’re doing and what changes you could make.
Two heads are better than one. When both partners are engaged in paying the bills, both will be motivated to trim expenses, stretch dollars, save, and invest in order to build wealth.
If one person pays all the bills and the other doesn’t know what they are, he or she may spend without knowing it is more than they can afford. Heated battles can ensue. However, if both partners understand their financial condition, an overspending spouse will be more likely to keep within their means, which will help restore domestic peace. Then, when the family savings and investments grow, both partners will be inspired to continue building the family fortune.
When you pay your bills together, also review your savings and investments. Discuss how each is doing and strategize. Ask if it’s producing as expected and if you should change anything. Talk about the type of investments you think that you should have and the people who you go to for advice. Decide who will be responsible for checking possible investment opportunities or contacting a new financial advisor.
When goals are set together, the chances of achieving those goals will increase.
When we set goals, they’re easier to reach when others support our efforts. That’s the beauty of teamwork. When we act alone, it’s easy for us to stray and accept our own excuses on why we messed up. However, it’s much harder to pull the wool over other people’s eyes — especially partners who are close to us.
When spouses and partners work as teams, they are less likely to wander or drift. Partners provide checks and balances and hold each other accountable. They each make sure that the other is doing his or her share, staying on track and performing well.
Partners working together are also more motivated to do well for the partnership. If one falls short, the other can jump in and pick up the slack. They can also motivate, encourage, and help each other to overcome adversity or to resist temptations.
When we leave this earth, do we want to leave our spouses in a position where they are bound to fail financially or be devoured by sharks? Of course not! We want them to be happy and do well. So it’s imperative that, at the least, they know the basics about finances so when they’re alone they won’t make major mistakes and can lead comfortable and healthy lives.
Talking with your partner is the answer. Have frequent, open conversations about your finances. Be willing to listen and take suggestions. Work together to pay your bills, review statements, and build your wealth. Speak with your accountant, financial and other advisors together. Become a team that is dedicated to working together to build your wealth.