Dear Readers,
In General family budget and managing the household's finances are take care by only one person. If you are reading this article you are that person. But its always advisable to for all the families that you and your partner should know about each and every aspect of your family finance, managing it.
what if you're just tired of managing everything yourself, or you partner wants to become more involved in your household's finances? How do you teach your partner everything you know?
In this article all the above question will be answered.
Make a list of everything and where it's located :
While you may be able to finish each other's sentences, don't assume your significant other possesses the intuition to know where you keep sensitive information. You may think your filing system couldn't be any more organized and that your financial records are in a pretty obvious location, but your partner might not. While you probably have printed documents related to some of your financial affairs, there's a good chance some of your information is stored solely in your memory bank, as you probably manage some of your finances online.
Without access to your email to receive monthly statement reminders, your partner probably doesn't know how to find all of your online accounts, and may not even know which banks and brokerage companies you use, not to mention all the bills you pay. A list of all of your accounts makes it easy for your partner to see everything that needs to be addressed.
Make sure your partner has access to everything.
Just knowing that these accounts exist won't be enough. If you want your partner to be able to take charge, you'll have to give him or her full access. Get your partner a set of keys to any safety deposit boxes, divulge the code to your safe and point out which tree in the backyard is beside where you buried the money. Make sure your partner is a named account holder or the primary beneficiary on all major accounts, life insurance policies and any property you own. Also, make sure he or she knows how to access any important computer files and online accounts.
If you're worried about writing your sensitive information down because of the possibility that the wrong person might find it, you're not alone. Here are some options for making your information available to the right person while keeping it safe from criminals (or ill-intentioned relatives).
- Put your list in a safe deposit box at the bank. Make sure your significant other has a key and is listed with the bank as being allowed to access the box. Obviously, this is best for emergency situations, not daily use.
- Make your list electronic and store it as an encrypted, password-protected file. Make sure your partner knows how to locate and access the file and that you have at least one backup copy in a separate location in case the first file is lost or corrupted.
- Encrypt your list the old-fashioned way. Create logins and passwords that have meaning only to you and your partner. This way, your written list can consist of prompts or reminders to your logins and passwords instead of the complete codes. If one of your passwords was the name of the restaurant where you went on your first date plus the date you acquired your dog, the password prompt you wrote down could be "marcos07xxxx" or "first date restaurant+dogbday".
what everything is and why it's important.
People tend to complete tasks more successfully when they understand the purpose of what they are doing. Just telling your partner that "this account is where we put our savings," isn't as good as explaining why you choose to put your savings there ("we get the best interest rate at this bank"). Likewise, saying "we have to pay x amount a month for y," isn't as helpful as explaining why you make the payment. For example, if your partner doesn't know what long-term care insurance is and why you're paying for a policy on your mother's behalf, he or she might cancel the policy.
Maintain a household budget.
Maybe you're not the type who needs to write everything down to successfully manage your money, but a budget is an excellent way to give your partner a big-picture idea of all the money in play - the income, the debts, the recurring expenses, the investments and so on. It can also help your partner pick up where you left off in managing the household's finances if you die or become incapacitated.
Have your partner watch you handle the finances.
Explaining things is helpful, and written instructions/checklists/spreadsheets are even better, but nothing beats sitting down with your partner and talking through actually managing the finances. Let your partner observe the process while you explain it, and then have him or her practice it with your help and guidance.
Gradually give your partner some financial responsibility.
If your partner currently doesn't handle the money at all, start off with a small, manageable task - preferably one with low stakes. For example, make your partner responsible for paying one small bill each month - something with a generous grace period on the payment due date, like the electric bill. As he or she become more adept, give additional tasks to manage. Eventually, have your partner handle all the finances for one month (with your supervision, of course). Then, try switching off months, with your partner handling the finances every other month until you both feel completely comfortable.
Discuss contingency plans.
Make sure your partner knows what you would do in an emergency or unplanned financial event. Don't just be conceptual - discuss actual, concrete strategies to handle unplanned events. If you received a windfall, which debts would you want to pay off? What are your savings priorities? Is there any charity to which you would donate a significant sum? On the other end of the spectrum, if there was a sudden loss of income, which bills would need to be prioritized, and which expenses could be reduced or dropped altogether?
Encourage your partner's ongoing education.
Your partner may be loathe to pick up a personal finance book on a Saturday afternoon, but reading the occasional article will get your partner learning about money at a manageable pace.
Conclusion
To teach your partner how to handle the household finances, take the time to provide him or her with a complete picture of your household's financial situation and provide access to all important accounts. Then, gradually teach your partner enough to ease your financial management burden or get by in an emergency. These may not be the most entertaining activities, but they are key to taking the best possible care of one of the most important people in your life.
