Husband, Does Your Wife Know How To Invest? Wife, Does Your Husband Know How To Pay The Bills?

by golbguru on May 4, 2007

couple not communicating financiallyI discovered something interesting yesterday. My boss doesn’t know how to handle his bills!

It was none of my business to know this, but during one of our conversations he happened to mention that his wife is away for a conference and he is supposed to take care of some their bills - and is basically having a hard time getting things done. :)

I didn’t think much about it at the time, but later, while walking home from school, I was wondering about how this reflects on the quality of communication of financial information between couples (for that matter…between two or more members of a family). I started connecting the dots from my previous conversations with friends and relatives, and realized that some sort of a *self-centered* financial management perspective was extremely common among families. For example, in most cases, the husbands dealt with all the stock market investments stuff - and the wives didn’t know absolutely anything about it; whereas, the wives dealt with groceries and household expenses - and the husbands didn’t know much about it. In all cases, the individuals were working for the family and their actions and intentions were not selfish. However, their financial knowledge was limited only to themselves (hence the term *self-centered*).

In the normal course of things, this type of approach could be considered as a part of an efficient distribution of responsibilities. But think about this for a moment - what happens to your finances in abnormal conditions in which you are unable to carry out your part of the financial workload? (various events can give rise to such situations; for example: call for military duty, accident, death, stressful times at work, and so on). In such cases, it is extremely essential that someone - with a similar level of financial knowledge as your’s - be available to take over your role and ensure financial stability….and this is not going to happen unless you have taken positive steps to share your financial knowledge with that “someone” who is going to take your place.

By the way, I am not talking about just having a will ready (in the extremely unfortunate event of a sudden death). A will only ensures the transfer of wealth in an orderly manner, it does not ensure wealth preservation. You can pass on millions of dollars to your surviving spouse (or children) but if you haven’t passed on your financial knowledge to them, those millions of dollars will probably vanish pretty soon.

You could also extend the importance of sharing financial knowledge to cases of separating couples. When together, they may have been rich, but when separated, both individuals might face financial difficulties - just because they never exchanged their financial knowledge with each other when they were a couple and now they can’t play the role of their missing partner.

Basically, the point is that we should regularly make efforts to communicate our financial knowledge to our partner (or a family member). Perhaps, switching roles often might help. Husbands: teach your wives to pick stocks. Wives: teach your husbands some household financial stuff. Keep some kind of a notebook to record information (including passwords) about all the websites/portals that you use for your financial transactions - and make sure your spouse (or a family member) knows how to access and use them. Without the proper exchange of financial knowledge, noble personal finance objectives may not serve their intended purpose.

Ah…so much for the train of thoughts that started with my boss’s little story.

If you have already taken steps to ensure that your personal finance knowledge doesn’t go to the grave with you, please feel free to share your tips with us.

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{ 21 comments… read them below or add one }

1 Sun 05.04.07 at 6:27 am

For me the question will look like this: “Husband, Does Your Wife Know How To Invest? Plus Husband, Does Your Wife Know How To Pay The Bills?”

Basically, I am managing all the money and investments in the house and even decide which credit card my wife should apply, :)) She’s just not interested in any these activities. She does have the veto power on what to buy, though.

2 John Wilks 05.04.07 at 7:06 am

I know how to pay bills and am teaching myself how to invest. However, my girlfriend doesn’t seem too interested in learning how to invest, diversify, use online savings banks, 0% apr credit card offers, etc.

Don’t get me wrong she pays her bills perfectly, has no debt whatsoever, and likes to find bargains wherever possible.

However, at the very least I want my girlfriend to open a FNBO Direct (6.0% apr) or HSBC (5.05% apr). How would I convince her to do so?

3 Moneymonk 05.04.07 at 7:37 am

Very good post !

This is so true, I think both spouses MUST be on the same page. Financial knowledge is the key. My husband and I knows every bill that comes through the mailbox. He knows every ETF and Mutual Fund we invest in. I make sure of that. He may not be too interested in the investment part, but at least he knows what is going on.

@ John, most women do not invest, beyond a 401k that is all women know. Stocks are risky, therefore most women pass on that. Women love security more than anything. It is not much conviencing you can do to get her on board. Once you guys are married she may be more inclined to do so because you are then, one !

Teaching anyone about financial knowledge is better than doing it for them

4 Caro 05.04.07 at 8:17 am

Interestingly enough, I do all of the finances (stocks, 401K, IRAs, mortgage, credit cards, the works) and my husband has very little interest. He sounds very similar to John’s girlfriend in that he is very responsible, but not at all interested.

I’ve worked to put together notes for all the sites I visit and my method for dealing with our finances. But I’ve also created a document called, “What to do if Caro dies.” In it I have included my idea for what he should do for future finances. For example, “Do not pay off the house with the insurance money. We have a great interest rate so invest the money.”

Most importantly I have given him a few different contacts in our friends/family network for people to talk to about managing the investments on an ongoing basis. I think it’s important to communicate on an everyday basis (and he does hear all about our investments) but also to recognize that this is never going to be his passion or interest and give him a resource that would be willing to help him out with it.

5 Wendy 05.04.07 at 10:01 am

I do all the investments, rollovers, credit card decisions, personal funds for goals, loans, etc. I have recently started to give him a monthly report on how we are doing so that he is in the loop.
We had tried it the other way with him trying to pay the bills, and save money and it just didn’t work. I’m not sure why, he can read financial statements, but has a hard time with the consistency of monthly asset management.
I am in a Money Club http://www.moneyclubs.com and all the other women in my group are in the same boat. They are by default in charge of the finances.

6 Chris B. 05.04.07 at 10:08 am

That’s how it is at my house. My wife pays the bills, and I take care of all the investing.

7 golbguru 05.04.07 at 10:20 am

All: Wow..it seems more one-sided that I initially thought.

Some of you have already tried it, but I would urge all of you earmark a couple of hours on weekends (or every other weekends) to *discuss* your financial status.

Discussions don’t have to be long - just an update about how much money is where - why you bought (or sold) a particular stock and stuff like that.

Initially, things will be tough - we humans have an incredible financial inertia - so we need a lot of coaxing before we start thinking/doing something. But, over the time I am sure things will be different.

8 oneway 05.04.07 at 3:35 pm

wow. very very interesting post :)

9 FinancialJungle.com 05.04.07 at 10:22 pm

Problem is that my wife isn’t interest in investing. Although I don’t consider myself an investment expert, I did accumulate my knowledge over a number of years. Having to pass all that to someone who is not motivated may not be effective. One alternative is to research for independent fee-based financial advisor who can take over the investment side of things once I pass away.

10 Maria 05.05.07 at 7:01 am

I agree that most families have a “self-centered” approach and in my mind it is especially dangerous. Alot, not all, women tend to give their financial futures over to their husbands. In Money- a memoir, women, emotions and cash, she talks about this indepth.

I happened to be the one who took care of our finances when my husband died so it wasnt that much different but if it had been the other way around, I just dont know how he would have handled the money.

Great post!

11 invincible 05.05.07 at 7:51 am

Should i call myself lucky, being single :)
Well u know what sometimes i feel i need someone to share these ‘headaches’.
Although i hv a room mate, i am the one taking care of all the bills (and thats an ugly job - gas, electricity, apartment rent, credit cards, cell phone, broadband, add car insurance). All these months none of my roomies has shown any interest in taking some bill-burden off me. Damn !!
I wud be happy to spend weeks to explain all these to my better half when she arrives on the scene.

12 DotNetNuke Consulting 05.06.07 at 5:08 am

Of course, i know how to pay bills. The question is the budget is enough or not?

13 Jackie 05.07.07 at 12:26 pm

Interesting post. I just posted yesterday at savingforwealth.wordpress.com about an article discussing a study by Fidelity Investments that found that only 23% of couples jointly participate in both long-term and short-term financial decisions–kind of sad statistic if you ask me.

14 dimes 05.08.07 at 11:56 am

My husband can run a ship’s finances. He cannot manage the finances of our household of two. I’m not sure what it says about our universe that this is our reality. I’m the investor, the billpayer, the budgeter, etc. He just walks around with a debit card and somehow manages not to overdraw.
Meanwhile he can keep the ship, whose annual budget is about $2 MILLION dollars, balanced to the last red cent.

15 KMC 05.14.07 at 7:16 am

Golbguru asks, “what happens to your finances in abnormal conditions in which you are unable to carry out your part of the financial workload?”

This happened to us after 9/11. Within a month, I was called back to active duty. We literally had two days notice. I do the financial stuff in our household. So how did it go getting called up? We spent about two of our precious last hours together going over accounts, automatic debits, etc. Not cool.

I strongly recommend this kind of cross-training. We need to do more of it, too. The problem comes, though, when your spouse isn’t particularly interested in investments (or whatever aspect).

16 karla (threadbndr) 05.14.07 at 12:22 pm

Like Maria, in one way I was also a ‘lucky’ widow. I’d been in charge of our finances all along. My hubby was just never interested and I’m an accountant - so it seemed logical that I do the bookkeeping and investing.

With a only one child - an adult who is active duty military - the ‘what to do’ document is essential. I have one from him with instructions on what to do, and he has access to one from me. And it’s not just the finances - who to notify, wishes on the funeral, copies of the wills and poa’s - all that stuff is in one ‘grab and go’ 3 ring binder.

Even though it was so difficult to think about and even harder to do, putting together these documents is the last loving thing you can do for your partner / children / family.

17 John Wilks 05.21.07 at 7:23 pm

I’m having some trouble creating a FNBO direct account.

firefox 2.0.0.3 Your Application Timed Out For security, your application has timed out. Please click the button to retrieve your application. If you are unable to retrieve your application, you will need to start over.

Internet Explorer 7.0.5730.11 same

Netscape Communicator 7.2 same

Any ideas, anyone?

18 Everydayfinance 06.20.07 at 7:26 am

I’ve had real trouble getting my wife to be interested in the investing/finance part. She does plenty with respect to managing the daily purchases, taking care of tons of stuff around the house and for the kids, but she’s just not interested at all in investing, managing the finances, etc (or even my blog!).

I’ve left her instructions on all my accounts, how to access them and what to do in the event of my lack of ability to make decisions. Ultimately, I want to avoid having to have her pay a financial advisor to manage the funds at the typical 1% assets per year. That’s a ton of money over the remainder of her life. This has me thinking about some additional things I could do to get the finances on autopilot. Thanks for the article and getting the wheels spinning.
Dan

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