By no fault of my partner, I had opted to hand over the proverbial financial keys to him when we got married, trusting him to make sound financial choices for both of us. This is not to say I wasn’t advised on all financial matters, I was, but I never gave it too much thought and put full trust in him. After coming to this realization and speaking about it with him, he assured me all is, and will be fine, but it was still troubling for me to realize just how little I knew about my family’s financial status and what our immediate future looks like without my income.
After years of managing my department’s budget it was both shocking and frustrating to recognize that I had placed such little priority in managing my own financial well-being.
How could I have left something this important, my personal financial success and security, fully placed in the hands of someone else, albeit someone I trust unequivocally?
It turns out I wasn’t alone in this, according to a UBS report, 56% of women surveyed stated they defer to their spouses for investment decisions and household financial planning. Now recognizing this huge misstep on my part, I seized the opportunity to turn this gap into an opportunity to educate and empower myself to be the chief financial officer of my future.
Research indicates that for those 40+ who own their home and other assets should invest 10-15% of their total income and ideally have a three-month emergency fund. With that in mind, one of the first tasks I set out to do was to take inventory of all aspects of our finances; reviewing our month-over-month expenditures, analyzing our spending habits, digging deep into our savings, investments, and emergency fund to gain a holistic view of our finances.
To make our budget more formalized I researched various budgeting apps and landed on Mint, where we are able to track and update our expenses in real time. It’s worth mentioning that this app may not be the right fit for a more conservative banker who isn’t comfortable with providing complete transparency of their personal finances on an app.
The last task I set out to do was to organize all our financial institution websites and passwords and set up a monthly finance date with my husband to review our monthly spending. Educating myself and taking control of our finances has been a rewarding and powerful exercise and I now have a clear insight into our financial potential and future.
After reviewing our finances and creating a shared budget tracker, I booked a meeting with our financial advisor to go over our finances, find out where our blind spots might be, and review our investments and the decision-making behind where we’ve placed our funds.
The meeting proved invaluable as she presented several scenarios that I had not considered: What type of financial legacy do I want to leave for our children? Have I weighed the benefits of saving versus expediting our mortgage payments? She also recommended clarifying my short, medium and long-term goals and outlining a more detailed debt-reduction strategy that has been immensely beneficial for my financial roadmap. While personal finances are unique and vary from person-to-person, I have come to learn that lifelong financial planning is a dynamic process and having an expert to help navigate this sometimes complex and tumultuous landscape pays dividends.
Money wasn’t ever spoken about in my family. It was always a quiet conversation my parents would have when the kids were out of earshot. My parents have a very balanced relationship so while there wasn’t any disparity in who handles the finances, I don’t think they ever considered teaching us kids about money management. The extent of what we were taught was that ‘money doesn’t grow on trees’ and it was left at that.
With that memory in mind and my recent ‘aha-moment’, I started researching tips and tricks for teaching my kids about the value of a dollar. I came across a couple of comprehensive articles in Forbes and The Simple Dollar that provide easy tips to start educating children about finances at all ages. Lucky for me my kids are still quite young, so I started with simple steps like a savings jar and setting attainable goals. Once the goal is achieved, they can then reward themselves by purchasing something with their own funds (or not). It’s amazing how quickly even the youngest of people realize the value of a dollar when they’re spending their own hard-earned money! I also purchased activity books, including A Kid’s Activity Book on Money and Finance and The Everything Kids’ Money Book that teaches young minds about finances through simple lessons, word searches, puzzles and other games.
I’m not sure why my younger self decided to hand over my financial independence when we got married. Perhaps I was tired of the responsibility or maybe I developed an unconscious bias of who should manage the money in the household; but what is clear, is that I did not recognize the power, value, and importance of always having an active voice and role in managing your own money. A lesson learned and now shared with the next generation of strong women, my girls.