Quick Hit: It’s Not Other People’s Money – It’s Yours
Here’s some shocking information for all you married/cohabiting women out there:
There are several programs, some of which are free, that can manage household finances. Despite the availability of these tools and their relative ease of use, I am amazed at how many women have little knowledge about their family finances. Women who, until they were married or had children, not only managed their own finances, but were lawyers, bankers, teachers, consultants, retail buyers, editors, event planners, etc. Some of them still work outside the home. Now, they don’t know their household income, the cost of their housing, what their family spends on groceries, clothing, utilities, etc. Ask them how many bank accounts they have, what’s in their IRA or 401K, if they have adequate life insurance, or college savings for their kids and they smile and just shrug. “My husband takes care of it; I am sure we are fine.”
Are you?
I’m guilty of this. Tim takes care of most of our finances, though I take care of my own personal ones. We pay bills together, but all that means is I give him enough money from my paycheck to do so. I guess I’m more involved in our finances than these women this article refers to are (I do know our household income and how much our bills are), but not much.
What about you? Are you involved in your household finances? If so, how?
I completely agree with this article! Finances are the biggest issue in a marriage. Seriously. The few times Joe and I have fought, it has been over money. Establishing a budget and understanding each others’ priorities has been a tough adjustment, and we’ve known each other since high school! Here’s how we’ve worked it out: I’m a person who needs to be in-the-know about all of that, as Karen Berman obviously is. We both have separate IRA accounts and I keep track of both of those. I track my two investment accounts, but of course I keep him in-the-know of what I have in those accounts. We have a joint checking account, which makes it easy for both of us to track income and bills. We have a joint credit card account, so we can both see expenditures. We have a budget set up where we are both allotted an “allowance” to do with as we please, and a couples “allowance” (for dinners out, nights on the town, etc.). I would say Joe monitors the bills more closely than I do (let’s face it, he has an office with a computer, and can be on it a good part of the day, while I am teaching, supervising, etc.), however I can double-check/authorize bills anytime he’s not around. So I guess he is more “in charge” of our finances, but we both keep tabs on them. It’s easier to have one person more “in charge” to keep things consistent, but it’s extremely important to understand what is going on.
Case in point, I am the one who does our taxes. For the last few years we have had purchases where we’ve gotten government rebates (car, house, etc.) and we have gotten nice tax returns. Only this year did I notice that Joe was not taking the proper amount of withholding from his paycheck. We ended up owning money come tax season and I was NOT a happy camper. It was one of those little financial shocks that reminded me why it is so important for couples to monitor finances together.
I would also like to point out that I find myself saving more money when I think about if I can justify a purchase in my mind as well as his. It cuts down on frivolous spending for both of us. Also, I think it’s imperative to know what is coming in and going out monetarily. I know what we bring in a month (and overall in a year), what we save, and what we spend. It took us awhile to establish this, (we’ve been married three years now, and on this budget system for almost a year, but knowing this information (i.e. the “big picture) is crucial to keeping on a budget (which is crucial to saving money!). Knowing when insurance is due or when the mortgage gets paid also prevents emergencies (such as flat tire repairs, etc.) from becoming catastrophes. I guess the one drawback is surprises are more difficult to purchase!