In 2021, here's why you and your spouse both need to be informed about your family's finances

Leaving money management entirely up to your spouse is risky business.    If you don’t know the basics about your finances – the passwords and account numbers to your retirement and bank accounts or the contact information of your family’s financial adviser -- that’s a problem. A big one.    You can’t control whether the stock market goes up or down, but you can control how knowledgeable you are about your own finances, especially the basics.   Being left out of the financial loop is daunting -- even in good times. But what happens if tragedy strikes, as it has for so many throughout 2020? Dealing with job loss, chronic or debilitating health problems, separation, divorce or worse yet a spouse passing away, are you informed enough to keep your household financially afloat?

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I’ve worked with thousands of families in my twenty-year career in financial services. Typically, our client’s main point of contact is just one spouse. That’s it. The other spouse isn’t involved.    When I ask clients why their spouse isn’t on the phone or attending a planned financial check-up meeting, the answer I most often hear is, “My spouse isn’t interested -- I handle the finances.”     I have heard this response from clients in the United States and in dozens of countries around the world. It’s almost a universal phenomenon and yet no one talks directly about the perils of this pragmatic yet all too common approach.

If you’re leading the charge alone, it’s a monumental disservice to your loved one. If you’re disengaged and relying on someone else, you aren’t helping anyone – particularly yourself!   This inherent contradiction is hard for most couples to notice or acknowledge. For the one in charge, there is a sense of pride that comes along with taking a solo approach. Pride that they are saving their spouse’s coveted time, worry and even boredom.

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But make no mistake, there’s nothing boring about knowing what’s going on in your family’s investment accounts.  Helping to ensure your family’s long-term financial independence and a dignified retirement? It’s vital.

‘Get interested’ in your family’s finances    If you’re the one in a relationship who isn’t interested in the finances, it’s time to get interested -- and fast.   The good news is, I’m not asking you to make big changes in your life.    I’m sure you’ve heard countless financial experts talk about the importance of having a will, life insurance and regularly contributing to retirement accounts. That’s fine advice -- and your household may already be following this.   What I’m talking about here is something much simpler: the basics. All it takes is five minutes per month for you to get up to speed and in the know with your family’s finances.

HERE'S THE AVERAGE DEBT AMERICANS HAVE BY LOAN TYPE   Here are some simple steps to get on the right track  1. Sit down with your spouse once a month and learn what the dang passwords are to your bank accounts, retirement accounts and investment accounts. Log in and check who the beneficiaries are for goodness sake!   2. If your spouse is the only point of contact for your household’s financial adviser or money manager, it’s time to change that. You should have an actual, on-going dialogue with them, too.  At least know the adviser’s name, company and phone number.

3. Better yet -- know what your family is invested in and why. You may think your family is on the path to financial independence and early retirement, but if your financial adviser has too much of your money in less lucrative investments like bonds instead of stocks, you could find yourself outliving your money. That’s devastating.   4. Model a team approach for your kids or even for your close friends who fall into this common trap, too. If you find yourself out of the financial loop, chances are your friends are too in their households.

GET FOX BUSINESS ON THE GO BY CLICKING HERE   Being prepared for life’s vulnerable moments   You don’t want to be scrambling to find your financial adviser’s phone number and the passwords to your investment accounts when tragedy strikes. Don’t be that person who after 15 years of marriage is now in the midst of divorce realizing that the family investment accounts didn’t have their name on the account. Worse yet, that the beneficiary was the spouse’s brother—not their kids. Enough said, right?    Over the years, I’ve spoken to many widows who luckily knew me well before they lost their spouse and they tell me stories of phone calls they would receive from financial ‘advisers’ looking to ‘help’ them because they’ve read the local obituary pages. This actually happens.

They try to convince them in their weakest moment to fire their existing, longtime financial adviser that their deceased spouse likely hired -- and instead allow this new adviser to completely take control. And who knows what these financial advisers are investing their assets in?

It's heartbreaking, I know. And it's even more heartbreaking when they actually decide to hire that new adviser.

CLICK HERE TO READ MORE ON FOX BUSINESS   Taking small steps now to understand the basics of your financial situation will make you stronger during the toughest of times. It’s never too late to do the smart and loving thing so that both parties are comfortable and knowledgeable.    The more you know, the more power you have. This is especially important during times of stress when you feel helpless, scared and alone. Don’t pass the buck to your spouse with your family’s finances, it’s a mistake that only exacerbates the challenges that come with inevitable hard times ahead.    Your future self and your family will thank you for taking more active approach now.   Carrianne Coffey is senior executive vice president of Fisher Investments’ Private Client Group International and Chairperson of Fisher Investments Europe.    Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. The foregoing is for general informational purposes and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.