Spousal Dynamics on Finance

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dipsylala
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Spousal Dynamics on Finance

Post by dipsylala » Sun Nov 30, 2014 1:18 pm

I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
(3) Neither cares about finance. Probably they won't be on this forum.

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LadyGeek
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Re: Spousal Dynamics on Finance

Post by LadyGeek » Sun Nov 30, 2014 1:29 pm

This thread is now in the Personal Finance (Not Investing) forum (financial planning).
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ChicagoMedStudent
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Re: Spousal Dynamics on Finance

Post by ChicagoMedStudent » Sun Nov 30, 2014 1:33 pm

Why did you not include the possibility that both parties are interested and engaged in their finances more or less equally, and therefore share in the decision-making?
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dbr
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Re: Spousal Dynamics on Finance

Post by dbr » Sun Nov 30, 2014 1:34 pm

dipsylala wrote:I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?

I don't know what people do in fact, but it would be a guess this is (and should be) a major source of worry. I also imagine the "not responsible" one does or should worry more than the responsible one as they are the ones who will reap the consequences. I am not aware of any really successful solution to this problem. You just try to keep the situation as simple and as manageable as possible, provide some recourse for finding all the information, and have someone in mind who will step in and help, such as a responsible child.

(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
(3) Neither cares about finance. Probably they won't be on this forum.

Rodc
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Re: Spousal Dynamics on Finance

Post by Rodc » Sun Nov 30, 2014 1:35 pm

(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
How about both care but to a different extent so one does most or all the work but they talks together and work out a consensus plan they both can agree to.

or,

How about both care but to a different extent, but they talk together and work out a consensus plan they both can agree to.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: Spousal Dynamics on Finance

Post by Rodc » Sun Nov 30, 2014 1:36 pm

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
Bold added.

No because the plan is set up to account for that possibility.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

stoptothink
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Re: Spousal Dynamics on Finance

Post by stoptothink » Sun Nov 30, 2014 1:37 pm

We're definitely in the 2nd category. She cares, but leaves it all up to me because I'm a bit more knowledgeable. She has learned quite a bit since we've been married, think she'd be OK if something happened to me.

BigJohn
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Re: Spousal Dynamics on Finance

Post by BigJohn » Sun Nov 30, 2014 1:48 pm

We are described by #1 and yes, I do worry about what would happen if I got hit by a bus tomorrow. I've done two things to mitigate that risk.

First, I've written a several page summary of financial affairs with details of all accounts to ensure heirs know the location of all assets. I've put all bills (including paying credit cards balances) on some form of auto-pay via primary checking account with overdraft protection linked to savings account that contains 6 month emergency funds and included those details in document as well. Lastly the document also contains my overall investment strategy including how to keep things on autopilot for a while.

Second, I have created a back-up plan if auto-pilot does not work. While I'm very comfortable managing all my own assets, as I approach retirement I found a fee only financial adviser for an hourly rate to created a plan for comparison. During discussion of plan we discussed her investment philosophy and fee structure both of which I found very reasonable. Written summary includes her name, fee details and instruction on how to contact her if needed.

I'm probably a lot more anal about these details than most but that's what happens when you're an engineer who's been heavily involved in risk management and contingency planning for 30+ years :D

Edited to add a critical detail - As part of the written plan my wife and I also have executed wills, financial POAs, heath care POAs and living wills for either of us being hit by a bus or both simultaneously.
Last edited by BigJohn on Sun Nov 30, 2014 5:18 pm, edited 1 time in total.

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Re: Spousal Dynamics on Finance

Post by JDCarpenter » Sun Nov 30, 2014 2:18 pm

dipsylala wrote:I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
...
This is us. Relatively speaking, DW makes the money; but she does so by working a ton of hours, including the disruptive OBG call nights/weekends. She has 99% delegated assets to me once they are in the door. Luckily, we've been on the same basic page for 30 years, and I keep her up to speed on a weekly basis. Plus, have written all passwords/sites, introduced her to "our" advisers over lunch, and kept her up to date as to why our retirement target has kept increasing over the years. (She knows where all of our accounts are and I've gotten her onto our quicken account a couple of times to see the details.)

Her thoughts are that she will hire a Fee-only FP if I get hit by a truck, and rely upon our sons as a fallback. (Plus, as soon as she retires and has free time, she'll be able to get up to speed quite quickly.) BigJohn makes a good point that I need to execute on: A WRITTEN plan/financial directive....
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Lafder
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Re: Spousal Dynamics on Finance

Post by Lafder » Sun Nov 30, 2014 2:21 pm

I am the one who takes care of paperwork and bills and finances. I discuss with my husband if I am having trouble making a decision. But for the most part I just make decisions and act on them. I wish he would be more involved in managing retirement accounts since he is much better at the math of it.

I made a notebook full of all of the accounts we have and passwords as well as our insurance agent and details like when property tax is due in case I die, and all automatic payments from checking account and credit card as well as utility info. I also make comments from time to time like where our dog's vet is since I usually deal with all of that too, or "This is the drawer and cabinet where all of the important papers are".

He is willing to do more with paying bills. But I am more organized and am more controlling I suppose.

Luckily we are pretty compatible about not spending a lot relative to our income and living within our means.

Perhaps I should do an experiment of seeing how long he could go without asking anything about our finances? I usually am the one to break down and tell him the size of our Vanguard account from time to time especially as it has grown in the past few years. Best I can tell he never logs into our accounts and checks balances or spending even though he does have access to all of the passwords I gave him.

I know too many couples where one partner controls all of the $ and complains about the other's spending, and the one does not even have access to all of their accounts or assets.

I am wondering why you are asking?
lafder

**edit we do disagree, he thinks I should keep almost no extra in checking and we can use credit cards or pull from taxable savings if we need $$ and the paychecks will keep coming in to pay ongoing bills. But I think we should have enough extra in savings we do not go to zero between income and payments. SInce I control the cash flow and amount left in checking accounts, I keep it at a level I am comfortable with which is always having 1-3 months of expenses on hand depending on where we are in the bill cycle**

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Re: Spousal Dynamics on Finance

Post by livesoft » Sun Nov 30, 2014 2:43 pm

We have shared duties temporally. That is, my spouse used to do all the bills, investments, car shopping, taxes, planning. Then we shared duties haphazardly. Then I did the investments. Then I did the bills, taxes, and planning. Then I gave her back some bills to pay. She makes sure that charitable contributions are made, but I make sure the donor-advised fund is topped up every year. We always talk about big stuff and don't sweat the small stuff.

There you go; it's pretty dynamic.

I think if either one of us died, the other could do the family financial stuff without a problem.
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desertbandit442
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Re: Spousal Dynamics on Finance

Post by desertbandit442 » Sun Nov 30, 2014 2:46 pm

We fall under scenario 1. I don't worry, I've done all I could. I wrote out 4-5 pages to follow for 1st year, short term (years 2-5) and long term (more than 5 years). Then, if she still doesn't want to mess with it, I have a fee only contact that I have already talked to for her.

anonforthis
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Re: Spousal Dynamics on Finance

Post by anonforthis » Sun Nov 30, 2014 2:58 pm

Number 1 for us. My husband doesn't care. I can spend or give it all if I want to. If he is gone, I will miss him and will not remarry again. Finances is the last thing on my list if he is gone.

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Re: Spousal Dynamics on Finance

Post by mhalley » Sun Nov 30, 2014 3:56 pm

Number one here also. I make all the financial decisions, with the exception that my wife wanted to have a more socially responsible investing style. So I put her in some socially responsible funds in her IRA, but for my ira/401k and our taxable account I do it the bogleheads way. I have instructed her to roll everything over to vanguard and let them manage it if I die first. I guess I could put everything in a Target Retirement fund and save her that .3% but I think she might need some hand holding. I have tried to get her interested in it multiple times, but it just ain't gonna happen.
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Re: Spousal Dynamics on Finance

Post by nanoanalyzer » Sun Nov 30, 2014 6:33 pm

(1) here, and I'm terrified.

I try to bring her in every time I do anything financially, even for writing the mundane monthly balance sheet forecast. Often remind her, "Hey, if I get hit by a bus tomorrow, nobody is going to do this!" Unfortunately, either I go too fast and lose her, or she otherwise loses interest in the middle of it.

Time to write this stuff down. Please keep the suggestions coming.
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Re: Spousal Dynamics on Finance

Post by LadyGeek » Sun Nov 30, 2014 7:28 pm

For the "hit by the bus" scenario, see the wiki: Estate planning

Read this thread, which is in the "Forum discussions" section: Death Book

For the "gray area" in which you survive but are incapacitated to make any financial decisions, see an estate planning attorney and get: will, living will (advanced care directive), medical power of attorney, durable power of attorney.
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Re: Spousal Dynamics on Finance

Post by MathWizard » Sun Nov 30, 2014 8:11 pm

This is just division of labor in our house. The one more interested/ most capable
takes in the tasks up to where we are both doing about the same amount of work on average.

Somebody reconciles banks statements, mows the lawn, cooks meals, takes care of kids.
What happens when one gets sick for a while?

If our house, the other handles everything, lets it ride, or hires it out. The same
would happen if the temporary situation becomes permanent, so I don't worry.
What else are you going to do?

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Re: Spousal Dynamics on Finance

Post by PinotGris » Sun Nov 30, 2014 8:18 pm

We both care but i do the plannng, executing the investment, balance and rebalance, pay the bills, track the investments. I have made a binder with all passwords and id. He is better at math but not so into investment philosophy, AA, etc. i like and enjoy learning and doing all the work. We discuss everything and he is coming around to seeing the value of having an investment plan and strategy. Either of us will be fine as survivor. We do taxes together.

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Re: Spousal Dynamics on Finance

Post by Jguild2120 » Sun Nov 30, 2014 8:28 pm

For the last 45 years I have managed the investments (I’m a Buy & Hold type of guy) and she has paid the bills. She never worries about the investments and I never worry about the bills. I have recorded all the investment info for her should I pass first. She has done the same for me relative to the bills. Also, monthly I produce our investment ‘score card’ which details all our investments, total value and returns. At the end of each month we sit together with a cup of coffee or a glass of wine (depending on the time of day :) and I take her through it. This way, between the two of us, has worked very well for many years. It will never change until the day one of us passes, which I pray is not soon.
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Re: Spousal Dynamics on Finance

Post by montanagirl » Sun Nov 30, 2014 8:53 pm

I do most the saving and he likes to spend. He's definitely not interested in mutual funds or investment, gets all paranoid and intimidated about it. If something happens to me, I think he could navigate my file cabinet well enough to get my IRA transferred to himself. I have confidence that he need only call Vanguard and they would guide him through it.

crg11
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Re: Spousal Dynamics on Finance

Post by crg11 » Sun Nov 30, 2014 9:23 pm

#1 describes my wife and I's scenario.

She has a diagnosed math learning disability and has never handled finances well on her own. When we first met, I saved her from a horrible cycle of bank overdrafts and late credit card payments, getting her on a plan that eventually got her out of credit card debt entirely. It wasn't done out of malice or buying unnecessary stuff, she just can't process the math easily or quickly and would make frequent budget mistakes that would compound over time and eventually come back to haunt her.

This left her so frustrated and overwhelmed that she gladly handed full control of her finances over to me once we became engaged and later, married. We do discuss things such as our general budget and any transactions either of us have questions on, but I'm the one that watches every cent, moves money around to ensure everything is paid on time, and figures out what the future (retirement) looks like.

She's been particularly thrilled with my financial awakening earlier this year (thanks Bogleheads and YNAB!). She's noticed a much improved confidence on my part when it comes to our finances, which makes her feel much better about the next stage of our life (starting a family).

A few steps I'm taking to improve financial communication more and hopefully loop her in a little bit more on how everything works:
  • I'm considering writing up a quarterly or semi annual snapshot and summary of where we stand. Then we can sit down and go through it, comparing with past years and show her the progress we have made.
  • I'm currently writing up a document on every account we have, where it is, and what it's purpose is.
  • I've all but decided to consolidate various accounts (going to one credit card, one bank, etc), with the goal of simplifying our finances so she has a prayer of handling everything if something were to happen to me. Plus makes things less stressful for me.

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Re: Spousal Dynamics on Finance

Post by MN-Investor » Sun Nov 30, 2014 9:29 pm

(3) Neither cares about finance. Probably they won't be on this forum.

Unfortunately, this describes my brother and his wife. He's a 54-year old physician and his wife has home schooled their four daughters, the oldest of whom started college this year. Both my brother and his wife are very busy and so they trust others to deal with their investments. First it was Edward Jones. Now it's someone else. There have been issues. We've told them about Bogleheads, but neither spouse wants to spend any more time on investments than what they are currently doing. Sigh.
The key to success - Save early, save often, invest well.

BigJohn
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Re: Spousal Dynamics on Finance

Post by BigJohn » Sun Nov 30, 2014 9:44 pm

LadyGeek, thanks for the Death Book link. A few things there I had not thought about documenting like router and smartphone info.

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Re: Spousal Dynamics on Finance

Post by humbledinvestor » Sun Nov 30, 2014 9:56 pm

nanoanalyzer wrote:(1) here, and I'm terrified.

I try to bring her in every time I do anything financially, even for writing the mundane monthly balance sheet forecast. Often remind her, "Hey, if I get hit by a bus tomorrow, nobody is going to do this!" Unfortunately, either I go too fast and lose her, or she otherwise loses interest in the middle of it.

Time to write this stuff down. Please keep the suggestions coming.

Same here Nanoanalyzer. Terrifies me also. I have to do what BigJohn has done. We were discussing retirement planning a few months ago and when I said who will manage our investments if something happens to me? DW's answer was "I will just hire someone". That terrified me given what I have learned about Financial Advisors since joining this Forum. One the other hand, DW is an ideal Boglehead-ish investor: She did not make any changes to her 401k during the Great Recession and also bought company stock that she has left alone for 5 years. The value of that stock has gone up 400%. Now it is a small amount, but still she is hands off and it has paid off.

I am working on getting all this paper work together and simply show her where it is and follow the Financial directive.

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Re: Spousal Dynamics on Finance

Post by Caduceus » Sun Nov 30, 2014 10:00 pm

It makes sense to simplify financial affairs as much as possible if one spouse is just not engaged in the financial management process.

Simplifying means not having more bank accounts than are necessary, automating bills and passing everything through a "central" checking account, developing a bias toward simpler investments (e.g. target-date retirement funds as opposed to slice-and-dice portfolios), and documenting everything.

Use one excel worksheet and document all the bank accounts, investment accounts, insurance policies, etc. Digitize all important documents (personal identity documents, year-end investment account statements, insurance payment receipts and contracts, etc.) Also list down deadlines of important bills, estimated payment amount and nature (e.g. annual or quarterly?) so that the surviving spouse (or relatives) can take over easily.

Especially for people whose eyes glaze over when the topic of finances comes up, the process has to be as straightforward and painless as possible for them to have a shot at getting it right.

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Re: Spousal Dynamics on Finance

Post by jackholloway » Sun Nov 30, 2014 10:12 pm

Simplification is possible - I helped a cousin through it.

Dump everything in the balanced and tax managed balanced funds, and even someone with math anxiety can likely handle it. Roll accounts into your IRA or 401k, and consider a trust so no retitling is needed on death.

Have a separate account for actual day to day and for emergencies. Get them thinking that way, and have a list of what an emergency is, then live that way.

As an alternative, get them in contact with a vanguard cfp, and let them do the talking, and see if you like the plan after.

It works surprisingly well, at least based on the few data points I have.

bluelight
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Re: Spousal Dynamics on Finance

Post by bluelight » Sun Nov 30, 2014 11:38 pm

Sadly we are #1. DH doesn't care to know about our bills or investments. I try to keep him on board with financial decisions and attempt to discuss future plans with him. Occasionally he will surprise me with minimal interest, but it doesn't last long. When I am tracking our monthly spending, he views it as I'm trying to suppress him from spending any money. I guess I need to step up my game to make sure he can easily find our account info if something happens to me.

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Re: Spousal Dynamics on Finance

Post by RVD » Mon Dec 01, 2014 3:02 am

we are #1. my wife doesn't really care and so i handle all of the finances. she does care in the sense that she likes to save money and finds satisfaction in seeing her savings account grow but as a result, she is always hoarding away income in low yield savings accounts and CDs and it's tough to get her to agree to invest in equity funds or even bond funds because she doesn't understand them.

i think our finances are also handled a little more differently than most. we have been married for 12 years and soon after we got married, we opened up a joint checking and savings account. however, we also have sole checking and savings accounts. my salary goes into my sole checking. her salary goes into her sole checking. periodically we both transfer to our sole savings accounts. we also typically transfer a set amount (that we each were comfortable with) into our joint checking and savings accounts. the joint accounts were essentially emergency funds that we never touch unless we agree to spend it on something big that neither one of us can realistically absorb...for example, buying a house or car. how much depended on our job situation at the time but usually it was enough that we were saving around $20k-$50k per year.

in our sole accounts, we split up the bills so that i pay the mortgage, utilities (electricity, gas, phone, cable, etc.) and she pays the annual property taxes, annual fees for insurances, life insurance, etc., and she pays for general household stuff (groceries, etc.). this arrangement worked well because while i'm good at paying regular monthly bills and such via automatic bill pay, i am not good at saving $10k, $20k, etc. for stuff like an annual property tax bill, etc. i also had more income than her so it was logical to take the bigger bulk of the bills. i don't really care to see my sole savings account grow so my accounts were mostly paycheck to paycheck after saving to our joint saving. my wife's accounts were different because she really liked to see progress in her personal savings (she got more satisfaction with that than our joint savings).

we have never had a fight about money. in many ways, this arrangement forces me to view her as having her money and she views me as having some of my money. she likes to shop for clothing, bags, shoes, jewelry, etc. and she goes wild sometimes but i don't really care that much. i had my stuff that i went a bit wild on at times such as camera equipment, high end road bikes, etc. if we had all of our income in joint accounts, we probably would save a little more money but i think it's worth not fighting over it and both of us are relatively responsible so it's worked out fine (we've never been in credit card debt or any other type of debt). we spent a lot on a car once (about $90k) and after that i preferred leasing expensive cars instead because i got sick of them after 2-3 years. she never complained about it but i think i'm over that phase of life now.

i usually don't even know how much she has in her sole accounts. a few years ago i went back to school to get my MBA and knew that it would be expensive so we talked about it. the cost for 2 years was $160k. she basically said "here's $100k from my sole savings account"...turns out that she had around $150k in there.

we continue this structure to this day. the main difference is that i have been taking our large joint savings account and investing it. i have moved most of it over to vanguard at this point so i am investing mostly in admiral funds. we still have money in the low-mid 5 figures in each of our checking and savings accounts so the total is in the low 6 figures which i think is a bit much but for an emergency fund being held in the bank i guess it's not too bad.

she doesn't care to learn about investments because she's simply not a quant person. she much more into art and things like that rather than analyzing funds, expense ratios, researching asset allocation, etc. so i do it. the only problem is that since she doesn't understand it, she's skeptical and afraid that i'm going to lose all of our money...

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Re: Spousal Dynamics on Finance

Post by lululu » Mon Dec 01, 2014 5:37 am

anonforthis wrote:Number 1 for us. My husband doesn't care. I can spend or give it all if I want to. If he is gone, I will miss him and will not remarry again. Finances is the last thing on my list if he is gone.
What about if you go first.

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Re: Spousal Dynamics on Finance

Post by dumbbunny » Mon Dec 01, 2014 5:58 am

dipsylala wrote:I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
(3) Neither cares about finance. Probably they won't be on this forum.
DW and I keep our finances/plans separate. If one of us "is hit by a car tomorrow" the other wouldn't worry financially.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Re: Spousal Dynamics on Finance

Post by Grt2bOutdoors » Mon Dec 01, 2014 8:31 am

I have a bookshelf full of personal finance/investing tomes written by numerous authors many of which are recommended on here.
My wife knows I'm a Boglehead forum member, knows we own index funds, knows I pay the bills and balance the checkbook, and that's about the extent of it. I haven't seen her once pick up even the easiest of books to read that we own, no interest at all. So, the end result of all this is I've been told "just don't lose our savings, make sure I pay the bills on time and don't forget to take out the trash" :)
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Re: Spousal Dynamics on Finance

Post by Grt2bOutdoors » Mon Dec 01, 2014 8:39 am

RVD wrote:
we continue this structure to this day. the main difference is that i have been taking our large joint savings account and investing it. i have moved most of it over to vanguard at this point so i am investing mostly in admiral funds. we still have money in the low-mid 5 figures in each of our checking and savings accounts so the total is in the low 6 figures which i think is a bit much but for an emergency fund being held in the bank i guess it's not too bad.

she doesn't care to learn about investments because she's simply not a quant person. she much more into art and things like that rather than analyzing funds, expense ratios, researching asset allocation, etc. so i do it. the only problem is that since she doesn't understand it, she's skeptical and afraid that i'm going to lose all of our money...
You know what the solution to that is right? You hold more in fixed income, if the @%^# hits the fan, you point to those holdings and say see we didn't lose all of our money and we still have X years to go. As much as I'd like to own more equity, day to day living requires a certain amount of liquid working capital to make it work, investments should not be considered to be "liquid" - Remember what Uncle Warren says, you should be prepared to hold your investment for a 100 years if the markets were to suddenly close tomorrow and you could not get your capital out nor receive any dividends/interest. The only instruments that will satisfy your cash flow needs will be cash, cd's, bonds in the interim. Didn't they teach you that in grad school? Good Luck - spousal finances are always a tricky wicket.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Spousal Dynamics on Finance

Post by TomatoTomahto » Mon Dec 01, 2014 8:53 am

Grt2bOutdoors wrote:I have a bookshelf full of personal finance/investing tomes written by numerous authors many of which are recommended on here.
My wife knows I'm a Boglehead forum member, knows we own index funds, knows I pay the bills and balance the checkbook, and that's about the extent of it. I haven't seen her once pick up even the easiest of books to read that we own, no interest at all. So, the end result of all this is I've been told "just don't lose our savings, make sure I pay the bills on time and don't forget to take out the trash" :)
I think we might have married twin sisters.

My wife is frugal by nature. If it were me, I would have retired already, but in addition to enjoying work, she feels that saving more can't hurt, so she plugs away. I guess it takes the pressure off of me to be a good investor :D
Okay, I get it; I won't be political or controversial. The Earth is flat.

Zecht
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Re: Spousal Dynamics on Finance

Post by Zecht » Mon Dec 01, 2014 9:57 am

dipsylala wrote:I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
(3) Neither cares about finance. Probably they won't be on this forum.
I would say my SO and I are mostly (1) with me doing all of the bill paying and financial handling. She understands and comprehends how to handle finances, but it is exceptionally stressful for her, I simply make sure she knows what is happening while it is being handled and obtain input as appropriate.

At work, we are expected to keep a succession planning document that lists all our current projects, and/or fully cross-train our designated backups in the event that something happens. I've found this sets a lot of minds at ease at home as well by ensuring that should you or your SO pass, the other knows where the pieces are to pick up.

davebo
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Re: Spousal Dynamics on Finance

Post by davebo » Mon Dec 01, 2014 10:34 am

I don't know if I fit in any of those categories. I do all the finance related activities....my wife cares, but she trusts me to make the calls and then just fill her in. She's a smart lady so she'd be able to pick up on all things financial if I get hit by a bus.

goblue100
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Re: Spousal Dynamics on Finance

Post by goblue100 » Mon Dec 01, 2014 11:14 am

LadyGeek wrote:For the "hit by the bus" scenario, see the wiki: Estate planning

Read this thread, which is in the "Forum discussions" section: Death Book

For the "gray area" in which you survive but are incapacitated to make any financial decisions, see an estate planning attorney and get: will, living will (advanced care directive), medical power of attorney, durable power of attorney.
We fall into the "1" category of the OP. My wife has no interest in this area. She was moderately interested earlier in our marriage, but now we have been married 26 years and trusts me not to gamble it all away, either literally or figuratively, she has checked out of the process. I have written my version of the Death Book and she knows where to find it. Keeping it updated is a bit of a pain but I make sure to go through it once a year, in early January. My estate plan is not perfect but all of my accounts do have up to date beneficiary's.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

Naismith
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Re: Spousal Dynamics on Finance

Post by Naismith » Mon Dec 01, 2014 12:23 pm

ChicagoMedStudent wrote:Why did you not include the possibility that both parties are interested and engaged in their finances more or less equally, and therefore share in the decision-making?
Yeah, that's a better description of us. My husband does not pay attention to the details or day-to-day bill-paying, but he is very involved with any major decisions and investment choices.

There is no question that he would do fine if forced to manage on his own. The records and tools are there for him.

The downside of this is that we spend more time discussing things than if one person did most of it....I can still say that we never fought about money, but certainly had some interesting debates or vigorous conversations:)

Streptococcus
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Re: Spousal Dynamics on Finance

Post by Streptococcus » Mon Dec 01, 2014 12:45 pm

#2 we both care, but I do all the planning and execution; I'm also more knowledgeable; we discuss everything and always agree. But if I were to miss my spouse would step up and be just fine.

anonforthis
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Re: Spousal Dynamics on Finance

Post by anonforthis » Mon Dec 01, 2014 1:24 pm

lululu wrote:
anonforthis wrote:Number 1 for us. My husband doesn't care. I can spend or give it all if I want to. If he is gone, I will miss him and will not remarry again. Finances is the last thing on my list if he is gone.
What about if you go first.
I hope not because he is 20 years older than me. Even with life insurance and assets, it's going to be tough for him if I go first. Unless he gets somebody as good as me (haha). He has to find a person that will take care of everything and bring home the money for his retirement.

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Re: Spousal Dynamics on Finance

Post by Meg77 » Mon Dec 01, 2014 3:50 pm

My husband and I both care very much about the finances and pretty much both do everything. Rather than splitting duties, we both check our investment performance, muse about what our target asset allocation should be, and read financial articles. All the bills are set up on automatic payment, and all the investment accounts are set up to automatically be maxed out. We decide together when it comes to adding or eliminating recurring expenses and dealing with a bonus or windfall. Otherwise we each spend what we want and manage our own investment accounts (adjusting 401k contributions in light of bonuses, making the odd stock pick or sale in our small individual brokerage accounts, doing backdoor Roth conversions, etc).

I look at our spending patterns more than he does by checking in on Mint every couple of days. I'm always the one to notice if a phone bill is unusually high or if we need to shop around for new insurance quotes. He's more likely to have read the latest news on some stock we own and know whether the dividend is being raised or earnings forecasts slashed. I update our net worth statement every month and let him know how we're doing.
"An investment in knowledge pays the best interest." - Benjamin Franklin

camptalcott
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Re: Spousal Dynamics on Finance

Post by camptalcott » Mon Dec 01, 2014 4:00 pm

dipsylala wrote:I'm just curious how a couple deal with financial planning. I can think of three broad categories.

(1) One does all the financial planning and the other does not care or even hates to think about it. In this case, does the "responsible" one worry what happens to the family if he/she is hit by a car tomorrow?
(2) Both cares but to a different extent. In this case, does the one who cares more does all the planning? What happens the two disagree, do they split their finance?
(3) Neither cares about finance. Probably they won't be on this forum.

LOL, there are so many scenarios in between these three.

My husband handled all the long term financial planning, I did more of the day to day money managing. I hate, loathe and despise investments. pretty much the only reason I force myself to do it is because I'm planning on retiring soon and need to be more manageable. It has nothing to do about caring. I find it hard to understand (even the supposedly easy bogle head books) and about as interesting as watching a moth eat leaves. I could have happily gone to my grave without ever learning about roth ira's or ROI or any other financial term

What we excelled at was in "goal" setting and planning. We talked to each other constantly about the dreams we had and then we acted on them. when we had a disagreement we simply talked until a compromise was reached.

My husband never ever worried about what would happen when he died. He knew the type of woman he married and had no worries about me taking care of business.

He passed away a little over a year ago and I'm not destitute, nor has some shady person made off with all my money.

financially I'm great.
"He who dies with the most toys is still, nonetheless dead"

Dandy
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Re: Spousal Dynamics on Finance

Post by Dandy » Mon Dec 01, 2014 4:16 pm

My dear wife just doesn't have the interest or background in financial matters. Thank goodness she spends money wisely. But it is a real concern to have the total responsibility and to worry about how she will handle things if I die first. I'm a conservative investor but I think she would be even less risk averse.

I'm not happy with any Target Date or Life Strategy fund. At some point I will need to compromise but that still leaves taxable. The "not interested in finance" spouse is easily a sheep ready for shearing.

RVD
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Re: Spousal Dynamics on Finance

Post by RVD » Mon Dec 01, 2014 6:31 pm

Grt2bOutdoors wrote:
RVD wrote: she doesn't care to learn about investments because she's simply not a quant person. she much more into art and things like that rather than analyzing funds, expense ratios, researching asset allocation, etc. so i do it. the only problem is that since she doesn't understand it, she's skeptical and afraid that i'm going to lose all of our money...
You know what the solution to that is right? You hold more in fixed income, if the @%^# hits the fan, you point to those holdings and say see we didn't lose all of our money and we still have X years to go. As much as I'd like to own more equity, day to day living requires a certain amount of liquid working capital to make it work, investments should not be considered to be "liquid" - Remember what Uncle Warren says, you should be prepared to hold your investment for a 100 years if the markets were to suddenly close tomorrow and you could not get your capital out nor receive any dividends/interest. The only instruments that will satisfy your cash flow needs will be cash, cd's, bonds in the interim. Didn't they teach you that in grad school? Good Luck - spousal finances are always a tricky wicket.
Yes, so I think that I am a bit heavy in fixed income for a low in my early 40s. I am at 40% bond funds, 20% cash/money market (liquid capital + emergency), 35% equities/equity funds, and 5% misc (reit, etc.). If I exclude emergency funds from the portfolio, I'm at 52% bond funds, 41% equities/equity funds, etc. I think our emergency fund is a little high (about 1 year's worth) but I'm fine with it.

Part of it isn't that she doesn't think I'm smart, etc. but just a bit of uneasiness in the unknown.

RVD.

virgingorda
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Re: Spousal Dynamics on Finance

Post by virgingorda » Mon Dec 01, 2014 7:20 pm

I shop at Marshall's, he shops at Barney's. I make sure the bills get paid and handle the investments, he makes most of the money. Enough said (#1 - duh. Though I need to deal with the hit-by-bus issue. A part of me thinks having to figure it out from scaratch could be a useful thing, though.)

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Re: Spousal Dynamics on Finance

Post by BigJohn » Mon Dec 01, 2014 8:45 pm

anonforthis wrote:I hope not because he is 20 years older than me. Even with life insurance and assets, it's going to be tough for him if I go first. Unless he gets somebody as good as me (haha). He has to find a person that will take care of everything and bring home the money for his retirement.
You're planning based on the most probable outcome not the worst case. This is why I use the term "if I get hit by a bus" to describe the scenario for which I'm planning. The world has a lot of people and some incredibly low probability events occur everyday. I want to be sure my wife is OK even if one of those low probability events happens to me.

anonforthis
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Re: Spousal Dynamics on Finance

Post by anonforthis » Tue Dec 02, 2014 9:11 am

BigJohn wrote:
anonforthis wrote:I hope not because he is 20 years older than me. Even with life insurance and assets, it's going to be tough for him if I go first. Unless he gets somebody as good as me (haha). He has to find a person that will take care of everything and bring home the money for his retirement.
You're planning based on the most probable outcome not the worst case. This is why I use the term "if I get hit by a bus" to describe the scenario for which I'm planning. The world has a lot of people and some incredibly low probability events occur everyday. I want to be sure my wife is OK even if one of those low probability events happens to me.

So John, how do I plan for everything? I understand what you are saying though. I have a very good amount life insurance on me but if i go first, how much will it cost to hire a person: cooks every night, clean every night, iron his clothes, shop for groceries, pay bills, take care of the kids, take them to school/daycare, and many more activites. My husband only works and does nothing else. Therefore, i'm not sure how much money to replace me.

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BL
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Re: Spousal Dynamics on Finance

Post by BL » Tue Dec 02, 2014 9:18 am

anonforthis wrote:
So John, how do I plan for everything? I understand what you are saying though. I have a very good amount life insurance on me but if i go first, how much will it cost to hire a person: cooks every night, clean every night, iron his clothes, shop for groceries, pay bills, take care of the kids, take them to school/daycare, and many more activites. My husband only works and does nothing else. Therefore, i'm not sure how much money to replace me.
Sounds like he would need a wife! :twisted:

pennywise
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Re: Spousal Dynamics on Finance

Post by pennywise » Tue Dec 02, 2014 10:20 am

anonforthis wrote:

So John, how do I plan for everything? I understand what you are saying though. I have a very good amount life insurance on me but if i go first, how much will it cost to hire a person: cooks every night, clean every night, iron his clothes, shop for groceries, pay bills, take care of the kids, take them to school/daycare, and many more activites. My husband only works and does nothing else. Therefore, i'm not sure how much money to replace me.
This task allocation exists because you and your husband agree to it. Were you to depart, for whatever reason, most likely at least initially he would find it necessary to take on those chores himself. This is the logic flaw I've always found in what is a pretty common SAH spouse theme: that the loss of someone doing the household maintenance would perforce necessitate a sudden and immediate need for hiring paid help at an exorbitant cost, usually reached by imputing annual salaries of various service employees (housekeeper/cook/chaffeur etc). In reality many egalitarian couples handle these tasks and also both work outside the home. Perhaps even more single working parents maintain households themselves while doing that.

Probably a large subset of the respondents in the 'my spouse has no interest or idea about our finances' camp fall into this syndrome as well. It's easy to be oblivious when someone else is willing and able to take on the responsibility. If the partner is no longer available, the necessity to ensure that one has the financial wherewithal to keep food on the table, lights turned on and the house out of foreclosure will probably have quite a bracing effect on ability and interest in personal finances :D .

anonforthis
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Re: Spousal Dynamics on Finance

Post by anonforthis » Tue Dec 02, 2014 10:28 am

BL wrote:
anonforthis wrote:
So John, how do I plan for everything? I understand what you are saying though. I have a very good amount life insurance on me but if i go first, how much will it cost to hire a person: cooks every night, clean every night, iron his clothes, shop for groceries, pay bills, take care of the kids, take them to school/daycare, and many more activites. My husband only works and does nothing else. Therefore, i'm not sure how much money to replace me.
Sounds like he would need a wife! :twisted:

True!

anonforthis
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Re: Spousal Dynamics on Finance

Post by anonforthis » Tue Dec 02, 2014 10:38 am

pennywise wrote:
anonforthis wrote:

So John, how do I plan for everything? I understand what you are saying though. I have a very good amount life insurance on me but if i go first, how much will it cost to hire a person: cooks every night, clean every night, iron his clothes, shop for groceries, pay bills, take care of the kids, take them to school/daycare, and many more activites. My husband only works and does nothing else. Therefore, i'm not sure how much money to replace me.
This task allocation exists because you and your husband agree to it. Were you to depart, for whatever reason, most likely at least initially he would find it necessary to take on those chores himself. This is the logic flaw I've always found in what is a pretty common SAH spouse theme: that the loss of someone doing the household maintenance would perforce necessitate a sudden and immediate need for hiring paid help at an exorbitant cost, usually reached by imputing annual salaries of various service employees (housekeeper/cook/chaffeur etc). In reality many egalitarian couples handle these tasks and also both work outside the home. Perhaps even more single working parents maintain households themselves while doing that.

Probably a large subset of the respondents in the 'my spouse has no interest or idea about our finances' camp fall into this syndrome as well. It's easy to be oblivious when someone else is willing and able to take on the responsibility. If the partner is no longer available, the necessity to ensure that one has the financial wherewithal to keep food on the table, lights turned on and the house out of foreclosure will probably have quite a bracing effect on ability and interest in personal finances :D .



I am not a stay at home mom. I have a full time job and more. Somehow I doubt my husband can do these tasks himself. The children will probably eat peanut butter sandwich or eat out every night. They will probably get a bath once a week or month, not every night like I do now. I do not worry about fiances if i go first. I worry about my kids and husband well being if i go first.


Sorry for taking over your post OP. I will stop now.

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