Welcome back to the fifth article in the “Confessions of a Financial Planner” series where I talk about the areas of my life where I don’t follow the general rules of finance. This time, I’m talking about how I primarily handle most of the finances in our marriage, and why I don’t love that arrangement long-term.
You can read the other articles in this series below:
- Confessions of a Financial Planner: I’ve Held “Too Much” Cash
- Confessions of a Financial Planner: I Felt Guilty About An Inheritance
- Confessions of a Financial Planner: I Took Two Years to Update My Estate Plan After Getting Married
- Confessions of a Financial Planner: I Bought a House for Three Years
I entered the financial planning world while in college and have worked in it since, so I’ve seen first hand what happens when one spouse primarily handles the finances and the other person becomes disabled, passes away, or they get divorced.
It’s not easy. It causes huge problems. That’s on top of it already being a tragic time.
I always told myself my wife and I weren’t going to be that couple. We were both going to be actively involved in the finances. Yet, here we are — somewhere I told myself I’d never be.
Let’s explore why we split the roles this way, how it came to be, why I don’t regret it, how I plan to change it in the future, and actionable ideas if you are in a relationship where one person primarily handles the finances.
The Confession of a Financial Planner: I Handle Most of the Finances
My confession is that I primarily handle the day-to-day finances for our household with a few exceptions.
As a financial planner, it comes naturally to me, and for the most part, I enjoy it. When talking with friends who are also financial planners, we’ve concluded it’s a blessing and a curse. We are always planning and thinking ahead. That’s helpful when we are talking about big life stuff. It’s not so great when we are trying to live in the moment.
When it came to life insurance, I drove that process with a life insurance broker. I calculated the amounts and terms. We recently went through the life insurance process again because the amount we needed changed. Working with the broker, we were even able to add $1M of coverage, extend the term length a little, and pay about the same.
When it came to disability insurance, I also spearheaded that project with an insurance broker. I asked most of the questions, helped guide which riders to add to the policy, and maximum limits.
I insisted on updating my estate plan and creating hers for the first time after putting it off for years.
When it comes to investing, I manage our brokerage account and help her with her 403(b). We discuss the pros and cons of pre-tax vs. Roth contributions to the 403(b) and how that factors into her student loan repayment.
I pushed for a budgeting app to see historical spending and income, particularly since we have been through many transitions the last few years.
Our mortgage payment runs through my individual account (major shudder). All of the electricity, internet, and other house bills also run through my individual account. It was a busy time when we set it all up, and that’s how it came out, in part because we had just bought a house, and I wanted to be able to access and pay bills with her busy schedule.
She previously had been more involved in our finances, but when we had to contact a utility company, it was challenging when I wasn’t the primary contact. Since I’m home more often to deal with things as they come up, it made more sense for run the bills through my account. It’s not ideal.
I plan and estimate most vacation costs. Then, I get her to sign off before booking.
She pays her own credit card and manages her cash flow, though most of our joint stuff runs through my individual account.
Side Note: For those wondering why we don’t run everything through a joint account, it’s because this is how we chose to do our finances. It’s evolved over time and will continue to evolve, and this is what worked best for us.
I’m doing most of the things I told myself I’d try really hard to avoid when I saw it in other couples. Let’s explore why.
Reasons/Excuses of Why I Handle Most of the Finances
There are two primary reasons I handle most of the finances: my wife’s schedule and my job as a financial planner.
My wife doesn’t have much free time. My wife completed her residency last year and is in fellowship now. For the last three years, it wasn’t uncommon for her to get home some time between 6 p.m. and 11 p.m. any day of the week and have regular overnight call. This is when she would switch to working overnight and then immediately switch back to days.
Although her working hours are more regular now, she is on call about once a week now where she works a 24 hour shift, comes home in the morning, wakes up for a few hours around dinner, and then goes to sleep to work a normal day the next day. When that happens, that’s two out of seven days of the week where no life stuff happens for her.
Her schedule simply isn’t conducive to doing many “life things”, such as finances. That’s why I also do 99% of the grocery shopping and cooking in our household.
The other excuse of why I handle most of the finances is that it comes naturally for me. I work in it on a daily basis. If we are trying to optimize for time together or time for her to do things she enjoys, such as running, walking with friends, and gardening, having her do the finances is not the most efficient use of time.
We could have her research everything in order for her to learn, or I could do it and explain it. The same thing happens in reverse for any small medical concerns in our household. I could search online for what it could be, or I can simply ask her. She usually knows, and if she doesn’t, she has access to a system where she can find the answer in about two minutes. It’s not efficient for me to try to figure out medical concerns.
We both have specialized training in what we do. It doesn’t make sense to try to go against it when time is already in short supply.
Do I Regret Handling Most of the Finances?
I don’t regret handling most of the finances at this point in our lives. In many of the conversations I have with clients, the phrase “it is what it is” is often said. It applies here.
It’s my way of saying there is no point dwelling and feeling bad about what you’ve done in the past. If you want to change it in the future, you can. Otherwise, we keep it as-is because that makes the most sense given this moment.
There are certain aspects of our lives we wish we could change, and we could with enough time and energy. We aren’t at a point where either of us want to change it. It’s working good enough, and sometimes good enough is okay. It’s not ideal, and that’s okay for now.
Would it be awful if I died and would my wife have trouble with the finances? That’s very likely.
That’s one reason why I keep a semi-updated document (it needs to be updated again) that details where my accounts are, what they are used for, and other important details. It’s also why many would consider me over-insured. I want the life insurance company to write my wife a check if I were to die early so that she doesn’t need to worry about the day-to-day stuff immediately.
I’m hoping that as she finishes her training and launches into her career, she’ll have a more normal schedule where we can get everything set up more ideally. I also hope at that point we’ll have fewer transitions on the horizon. For those not in medicine, it’s a revolving door of unknowns — unknowns about where you are going to live, what your schedule will be next year, and when you’ll have time to plan your life.
Transitions aren’t helpful when it comes to personal finance aspects, such as taxes, insurance, and estate planning. But, it is my time to shine as a financial planner. Transitions, or more accurately, before transitions, are where a sounding board and accountability partner can be helpful to map out how to make the transition as smooth as possible. That could be a transition such as retirement, moving states, birth of a child or grandkid, an inheritance, divorce, or any other big life change.
Why It’s Important for Both People to Handle the Finances
I’m adamant that it’s important for people in a relationship to handle the finances together because I’ve seen the end result when the person who handled it is no longer there, either through death, disability, or divorce, and it’s life altering.
I’ve met people who tied up money in an annuity for five or more years because they didn’t want to deal with the money they received from life insurance and weren’t sure what to do with it.
I’ve met people who struggled to pay their bills because they weren’t sure how to access the money and which bills needed to be paid.
I’ve met people who had to call 10 different financial institutions because their spouse believed in “custodian diversification” and didn’t want to simplify and consolidate their lives.
In all of these situations, it usually takes years of active work to get everything set up properly and feel confident about their finances. If they had been involved in the process while their spouse was alive, it still would have been hard, but it would have been much smoother.
Think about it this way: it’s easier to finish the last few pieces of a puzzle if it’s already started as opposed to having never taken it out of the box.
This doesn’t mean that you need to sit with your significant other while paying bills every single time or trade investment accounts together, but it would be helpful if you paid them together a couple of times a year or your spouse knows how to get into your investment accounts.
At the bare minimum, create a document that details what happens if you die like I mentioned above. I experienced a husband who did this for his wife, and it made the death process much easier than someone who left nothing. It was night and day of difference. There were still hiccups along the way, but nothing like the widow/widower who has no idea where to start.
Actionable Ideas if One Person Handles the Finances
If only one person is handling the finances currently, you don’t need to change everything today. Below are a few ideas to get you started.
Create an In Case of Emergency Binder
The first step I would take is to create an in case of emergency binder. You can either create one yourself or buy one of the many different models online.
This binder should tell your spouse what they need to know if something happened to you. It should have titles to cars, investment account information, banking information, who your insurance agent is and how to contact them, have copies of your estate plan, medical information such as prescriptions, information on kids and pets, and everything else that details your financial life.
Include Them on Financial Tasks
Throughout the year, start including them on financial tasks. If you review your spending once per year, sit down together to do it. Show them how much you’ve spent on different categories, what you spend per month, and which accounts you use.
As you make changes or review your investment accounts, explain the different types of accounts and where they are held.
If you do your own tax preparation, go through that process with them, where they can find the tax forms, and which program you use. If you have an accountant, introduce them and explain how you work with them.
The key is not necessarily to make both people proficient at everything, but at least provide exposure to the task. That way if something happens to you, they have at least seen it and are not starting from scratch.
Have a Money Date
I don’t care if you’ve been married for 60 years or just started a relationship — having a money date can be helpful. You can talk about how you are feeling about money, what spending you’d like to do in the next few years, and what’s important about money to you.
Below are a few questions to get you started:
- If you had all of the money in the world to feel secure, how would you spend it?
- What was money like growing up for you?
- What’s one memory where you felt poor?
- What’s one memory where you felt rich?
- What is one thing you spend money on where it doesn’t feel aligned with how you would like to be spending?
- What’s one big purchase you’d like to make in the next five years?
These types of conversations can be enjoyable and illuminating because you are not going in with specific goals other than to have a conversation. It’s fascinating where they can lead. Even better, anybody feels like they can do them, which can provide confidence for tackling other financial tasks.
Final Thoughts – My Question for You
I don’t feel good knowing that I handle most of the finances in our relationship, but I also don’t regret it.
I’ve worked within the constraints life and my wife’s career place on us to find something that works well enough. I fully plan on revisiting it in a few years when we feel more settled, but in the meantime, I’m giving myself grace.
My past self likely would have judged my current self, and that’s a good reminder that there are many ways to handle your finances. There are different seasons of life, and it’s okay to approach your finances differently during each one. In fact, it’s encouraged.
Accumulating money is very different from spending money. I encounter that frequently with my clients entering retirement.
I’ll leave you with one question to act on.
What’s one action you will take in making sure your spouse or significant other feels confident to handle your finances?
