For Those Who is the CFO of the Whole Family: Is Your Spouse Financially Prepared?

If you have read Flexo's post "You, Inc.: How to Be the CFO of Your Own Life" at Get Rich Slowly yesterday, you knew what he meant of being the CFO of his own life: managing everything financial himself. Since I started reading posts on Pfblogs.org in August, I noticed from their posts (monthly expenses reports, net worth updates, financial goals, and investment decisions, etc.) that most, if not all, pfloggers are actually in charge of the financial matters around their houses, making them either the CFO of their own, or the CFO of their families (they do share responsibilities with their spouses).

For me, it's the same. Ever since I married ten years ago, I am the one paying all the bills, opening all the bank accounts, making all the investments, and managing all the documents, except purchase decisions which my wife has the veto power. A result of being the all-around manager of finance is that my wife doesn't have a clue when the bills are due, how to make credit card payments online, even how many credit cards she has. There were a couple of times in the past that I tried to teach her the simple things like where and how to access our online bank accounts and check credit card transactions. She showed 5-minute of interests and then said she had enough to swallow and never followed up. Maybe because she trusts me to manage our money, or perhaps she isn't enthusiastic about investing, or she feels she can do better in other areas such as taking care of our daughter or shopping for clothes, she isn't actively participate in our finance. It's all me.

While I have no problem of taking all the responsibilities, her lack involvement worries me. Early this year I told her that I need to write down all the account numbers, login names and passwords of our banks, credit cards, insurances, brokers, mutual funds, and loans, so she knows what and how to do should anything unexpected happen to me. I hate the idea of thinking anything bad, but I have to face the reality. If I can't stir up her interests in getting into the finance now, at least I can make sure she knows what we have at the time she has to know, whether she is ready or not.

Another reason I write this post is an article I read this morning on Morningstar.com. The article, "Prepare Your Spouse for Financial Independence," says that most of the time, one spouse in the family takes the lead in managing the finance of the family and asks us a question

"What happens when that financially aware partner is gone?"

To help your partner being financially independent, the article offers the following guidelines:

How to Locate Financial Documents: Write out instructions on how to find everything financial and leave it to a trusted individual.

  • A list of all financial accounts including account numbers, passwords, institution and contact information
  • Any hiding places where you've stashed things.
  • How to value collections of stamps, musical instruments, art, antiques, and so forth.
  • If you have any stock certificates or bonds, transfer them to your investment account or www.treasurydirect.gov.
  • The combination to your home safe.
  • Where you keep important papers for annuities, appraisals, birth certificates, cemetery deeds, credit cards, deeds, marriage certificates, divorce decrees, insurance policies, mortgages, income tax returns, retirement accounts, prenuptial agreements, titles for cars, estate documents.

What to Keep and Where:

In a bank safe or deposit box

  • Car titles
  • Deeds for property
  • Business agreements like partnerships or buy-sell agreements
  • A detailed home inventory listing all valuables including pictures or videos and appraisals
  • Ethical will: typically an account of your life, usually videotaped, that explains important life lessons or values that you want your heirs to know about

In a fire-resistant home safe

  • A copy of your will and/or trusts
  • Insurance policies
  • Investment account numbers and passwords
  • Original powers of attorney for health care and property
  • Letter of instruction explaining final wishes

In a home filing system

  • Three years of statements for insurance payments, bank accounts, investment and retirement accounts
  • Credit card and mortgage statements for the past year
  • Three years of tax returns (if not seven years)

At your attorney's office

  • Signed and witnessed will and trust documents
  • Copies of powers of attorney

Of course, the best strategy to make the transition smooth is "Share Financial Responsibility Now."

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This post was written by Sun You can find out more about Sun and his activities on Facebook , or follow him on Twitter .

3 Responses to “For Those Who is the CFO of the Whole Family: Is Your Spouse Financially Prepared?”

  1. Him |  Nov 16, 2006 at 2:13 pm

    Great post! Do you mind if I include it in our upcoming “Relationships and Finances” post?

  2. The Sun |  Nov 16, 2006 at 2:24 pm

    Him: Please go ahead with the inclusion. I am glad that you like the entry.