One of the many benefits of marriage is having a partner to share in the day-to-day tasks. One person might handle the laundry while the other takes over yard work. But, when it comes to money management, while you may end up delegating most of the responsibility to one person, it's in every couple's best interest to be mutually involved in the family finances.
Life is full of uncertainty and change, and it's possible, even likely, that you will be responsible for your own finances at some point. For many, the financial impact of significant life changes, from the good, like marriage and children, to the not-so-good, like death and divorce, is often a costly afterthought. While divorce and death are difficult possibilities to accept or anticipate, they are changes that come with many financial implications. This holds especially true for women who typically outlive their male counterparts. According to the National Association of State Treasurers Foundation, 90 percent of women will be solely responsible for their finances at some point in their lives.
However, despite the likelihood of eventually living this new financial reality, less than half of women (45 percent) and men (41 percent) have a contingency plan in place should something happen, according to research by TD Ameritrade, Inc.
"It's not always the easiest conversation to discuss with your partner because it forces you to think about worst-case scenarios," says Lee McAdoo, director of Women's Initiatives at TD Ameritrade. "But you'll find that discussing your family finances and setting goals together can also give you peace of mind."
Life transitions are often times unexpected and highly emotional, which can make decision making more difficult. For those reasons, it's best to plan ahead.
Here are 10 suggestions to help you make sure you can effectively handle your personal and family finances:
1. Create a detailed household budget.
2. Compile all your financial documents, make copies and store them with your attorney or place them in a safe deposit box that you both can access.
3. Conduct an inventory of marital assets.
4. Determine medical expenses and other annual costs for your family such as activities fees for your children and gym memberships.
5. Review all your debt, including mortgages, student loans, car loans and credit cards. Obtain a current version of your credit report at least once a year.
6. Make sure each person is aware of how you file your tax returns and your tax filing status.
7. Discuss long-term savings plans and goals, including retirement and college savings plans.
8. Review beneficiary designations in your will and update if necessary.
9. Consider employee benefits for each person.
10. It can be helpful to have an attorney or financial adviser review financial documents and give you advice should you desire it.
TD Ameritrade has also launched a website dedicated to helping you navigate your finances during major life changes. More helpful tips and advice can be found at www.tdameritrade.com/life.
While involving yourself more in your finances means taking on extra responsibility, it can also help you feel empowered and set your mind at ease as you look to the future.