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Grab The Keys To Your Financial Bus

A recent UBS survey found that 58% of the wealthy women around the world that they surveyed defer to the men in their lives on important financial decisions.  Unfortunately 74% of divorced and widowed women they surveyed reported “discovering negative financial surprises after a divorce or death of their spouse.”[1]

In many partnered relationships or marriages, it’s common for one person to act as the couple’s “chief financial officer.” This person often takes care of paying the monthly bills and manages the couple’s investments.

In order to protect ourselves and our families, women must take an active role in the family finances.   Not just the day to day expenses, but as part of the decision making process for making long-term financial decisions. After all, it is about your long-term financial security both as a couple, and in the event you find yourself single again.

74% of divorced and widowed women they surveyed reported “discovering negative financial surprises after a divorce or death of their spouse”

If you’re the type of woman who has had neither the interest nor the desire to manage the family finances, you may have been happy to let your partner drive the family’s financial bus. But in some cases, the husband demands to be in solely in charge of the finances. In some extreme situations we have seen, he may not even be willing to let her know what accounts are where.

But if you don’t make any effort to share in the responsibility of steering your finances, you are putting yourself at great risk of being left high and dry if you one day become single again. Remember, 90 percent of women end up having to manage their own finances later in life.

There is a delicate balancing act required when it comes to financial planning as a couple. The decisions you make together will affect your ability to become financially independent as a couple. However, to protect your own interests, you must be fully involved as well. No matter how much you trust and love your partner or spouse, abdicating all financial responsibilities to someone else could leave you in a difficult spot if you become single again later in life, whether it’s due to divorce or the death of your spouse.

If you aren’t involved with your own finances, imagine how it would feel to be suddenly single again and having to start unexpectedly with no idea of where to begin or who to call. Whether it’s knowing how your electric bill gets paid,  how your savings are managed, or where your retirement income will come from, no woman should remain in the dark.

As a first step, sit down with your partner and let him or her know of your desire to get educated and take a more active role in your financial future. In most cases, your partner will welcome this news. But if your partner is not the type of person who is willing to cede any control, you may need to take additional steps to protect yourself. To get started, consider these actions:

  1. Have “the talk.” Sit down with your partner or spouse to review all aspects of your financial partnership. Discuss how much income comes in monthly, where your money is spent, and how your savings are invested. Discuss your plans for retirement and your kids’ education, if applicable. Don’t forget to check the beneficiary information on file for all accounts. Make sure ex-spouses, or other relatives are listed as the beneficiary. Know what’s in your respectivewills and where important estate planning documents are stored. Attend meetings with your financial advisor and become an active participant in every financial conversation. Don’t remain a silent partner!
  1. Gain access to your accounts. With so many people managing their finances online these days, understanding how the bills are paid can actually be more difficult than it used to be. It’s no longer a simple matter of reviewing your checkbook. Make sure you not only have access to all utilities, property taxes and credit card account, but also have access to all of your financial accounts. Contact the companies and ask to be listed as an “authorized party”, or set up Power of Attorney for any accounts your name isn’t already on. This will make it easier for you to get the information you need should your spouse no longer be able to handle the finances, or you find yourself suddenly single.
  1. Open accounts in your own name. When you hold assets in a joint account, one account holder can write a check or transfer all of the assets to an account in his or her own name. While it’s unlikely, there have been cases where one spouse depleted the couple’s savings prior to a separation or divorce. To protect yourself, you should always have some savings in an account registered in your name only. Similarly, to ensure you can gain access to a line of credit, maintain at least one credit card in your own name. As too many women have found out the hard way, if all of your credits cards are in your spouses’ name first, it is their credit history that has been built and not yours. On your own, you might be denied credit.

Consider hiring your own advisor. If your partner is not willing to share information or responsibilities, you may need to take things a step further and hire your own advisor to protect your interests. This is not a common step, but if your partner will not cooperate, it may be necessary.

[1] Own Your Worth, UBS, 2018, page 2

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