Talk ‘investments’ with your partner

I am afraid I have to start on a gloomy note here to drive home the point. A few years ago, a friend’s sister suddenly lost her husband. Left in a state of emotional turmoil with a toddler and no job to support her, her situation was heart wrenching to say the least.

While she did receive her family’s support, it was finally her husband’s friends who dug up some of the insurance policies and the few investments that were made by him and helped her claim them. But who knows what investments were left unclaimed!

Of course, nobody wants to put their family in such a state. But why then this reluctance to talk about money with the spouse? I can think of some reasons, especially with men: the first being most men assume their partners are simply not interested in knowing about money matters, when it comes to savings; then there are others who do not want to disclose their earnings or savings, lest the wife spends more. Then there is this – ‘Why should she have to know’ attitude; I don’t need to say more! If this is the case with men, I am afraid women, especially income earners, are no better. For many of them, empowerment and authority at work does not equip them the least bit in handling their finances. Once the money is credited to the bank account, it becomes the husband’s job to manage the investments. If you are an exception to this, good for you.

If at all people reveal their financial matters to their spouse, it is mostly after retirement, when they think the spouse needs to know their state of finance: one, so that they can plan the spend carefully and two, to ensure that the partner does not suffer in the event of death due to old age. Even here, many elderly people prefer to reveal the details to their grown-up children than their spouse.

It does not matter at what stage of your life you are in; you have to disclose your state of finance to your spouse. If you are young and married, your partner needs to know if you are running an education loan or whether you have a life cover. If you are middle-aged, with children, you will likely have a home loan, or sometimes an education loan taken on behalf of your child. You would also have some savings by then, none of which your spouse will know, unless disclosed and documented.

How to engage

I think there are a few simple and effective ways to ensure your spouse participates (if you initiate it, of course) in your money affairs.

1. Most of us take what the spouse says for granted. Get your advisor or your friend to talk about their experiences, or about the importance of savings and investments and the different avenues of investing. If you have a good advisor, make it a point to have your spouse in every meeting/conversation (or mark him/her in every mail correspondence with your advisor) you have with him/her and encourage your partner to seek any clarification, if required.

2. Work together to create a plan for your spending. It could be as simple as managing the monthly family budget, or planning to make some major consumer discretionary purchases such as a car. This may automatically entail getting involved in how to finance the purchase, saving or borrowing, and so on, eliciting interest.

1. Not everybody understands asset classes, compounding etc., but everybody understands goals. If you speak in terms of goals – be it a holiday, or children’s education, or retirement – nobody is going to ignore it. But it is equally important for you to make it look simple. If you asked your wife to track a portfolio of stocks for your retirement when she has no prior experience, chances are that she won’t. It is easier to track where you are headed in your goals, than track investments. At FundsIndia, it is easy for you to get your spouse to monitor goal-based investing with our Smart Solutions products.

2. That leads us to the next point, get your spouse to invest herself if she earns, or allow her to handle the money that you are investing in her name. For instance, if you invest with FundsIndia, add her account and let her monitor her own investments and talk to her advisors.

3. Keep your spouse informed about all your policies and investments and of course your login and pin credentials too, given that most of what you do would be online now.

And no harm in occasionally telling your spouse scary stories on what happens if you do not take control over your money!