Wednesday, April 3, 2013

Are you aware of your household financial situation?

Who handles the finances in your marriage?  If you don't, do you know what's happening with the money?  Do you know what kind of bills you have?  Do you know what your spouse makes each pay period?  Do you know what type of investments you have?

Whether you are divorcing or not, you should know the financial situation of your household.  I think it's a great idea for one person to handle the money.  Frequently, that just makes life easier.  However, it's also very important for the person not handling the money to know what's out there.  Obviously, in the case of divorce, it is extremely important to know the financial situation.  You need to know what assets and liabilities will need to be split between the parties.

However, what a lot seem to forget, it is also important in the event of an emergency.  If the spouse that handles all of the money is hit by a bus and either dies or is critically injured, how will the other spouse survive?  Everyone should be fully aware of what money is kept where, the existence of investments and life insurance policies, what type of debt well as how all of these things are titled.  The surviving spouse will need to access these things in order to keep the household afloat while the injured spouse is recovering or, in the event of death, move on with life.

If you take care of your finances online, make sure there is always a current list of login ids and passwords for the other spouse--remember to include the answers to security questions.  This does go against conventional wisdom of never write these things down, but you have to do something!  I believe there are computer programs that allow for storage of passwords, etc. and it is secured.  That might be a better way.  Remember to include the website addresses as well.  It's also a good idea to keep a simple list of assets and liabilities.  This way your spouse always knows what it "out there" for the household.

I, honestly, didn't think this was an issue anymore and I've been surprised by how many people give all of this to the spouse to handle and then simply forget about it themselves.  It really is so much easier to do it this way.  And, you really can do it this way....just make sure there is some sort of document for the other person and that person knows where it is.  That way, you're covered....just in case.