Why Couples Must Be Financially Literate

In every family, many married couples divide their household chores and other family matters. The husband might prefer to do the laundry and the wife always buys the family groceries. The husband might be in control of all things car related, but the wife always do the children cloths shopping.

Handling a family's financial affairs is another one of those tasks that usually falls to husband or the wife. Sometimes there are couples who are both engaged in the family's budgeting, bill-payment, savings and investing. But in most families, these "jobs" usually fall to the husband.

If you're reading my blog, there's a good chance that you're that person in your household. Maybe you have been educated in finances, or maybe you have no choice but to be in charge of your family finances.

The key danger you run in single-handedly managing your family's financial affairs is that you could leave your spouse out of the loop. If you left the world yesterday, would he or she know how to manage the family nest egg? Even if you expect that your spouse will look for a financial adviser for help when you're gone, would he or she even know where to look for advice?

Even if you're super fit, make sure that your spouse know how to handle the following issues if something unfortunate were to happen to you.

1. Where to Find Everything
Your first step is to list what assets you have and where to find them. Even if you're not an investment junkie, you are most likely having a number of different accounts scattered across several different financial-service providers. You may have it all straight in your head, but it could seem like a confusing mess to your spouse.

Try to summarise your investment accounts as much as you possibly can. Your partner will have a far easier time managing the family nest egg when you are not aound.

It also makes sense to develop a filing system that both of you understand. Start by creating a folder for each separate account, and be very picky about what papers you keep. (Keep: Shares and unit trust statements, with trade confirmations. Throw: Annual reports, prospectuses, and marketing brochures.)

Once you've done that, list all your accounts and account numbers (remember your life-insurance policies too), the names and telephone numbers of the people you deal with at various financial institutions, and any website addresses and passwords you need to gain access to your accounts. Store this information in an safe place and let your spouse know where it is.

2. Who To Contact
Your next step in leaving your spouse well prepared is to write down a list of your important financial contacts: financial advisers, insurance agents, accountants, and lawyers. Include their names, phone numbers, and email addresses, and also write a brief description of what they have done for you, especially me.


3. Which Assets To Access First
Some of your assets can be tapped at any time, while others may carry penalties and tax implications if your spouse withdraws the money prematurely. To prevent your spouse from making a serious and costly mistake, it pays to clearly list out which of your assets are liquid and which are not. As a general rule of thumb, you'll want to keep at least six months' worth of living expenses in highly liquid financial instruments, such as money market funds and your fixed deposit accounts.

4. Where to Go for Help
If you've been an financial do-it-yourself guru but you expect your spouse to seek outside help in managing your financial affairs after you've gone, it is better to look for financial advisers who share your investing philosophy and have served clients with needs like yours. Keep in touch with me.

5. How to Learn More
Even if you expect that your spouse will consult a financial adviser after you're gone, he or she will still need a basic understanding in financial planning. A few simple investment books will impart a lot of information for your spouse. Reading my blog will also impart some knowledge about financial planning.