Be In the Know: 12 Questions To Ask About Your Own Financial Planning
For many, thinking about finances can be a BUZZ kill. Talking about finances with a spouse can be even more difficult. ‘Divide and conquer’ seems to be a popular mantra these days in many marriages. When it comes to long-term financial planning, it’s okay if one person takes the logistical lead, but both parties need be involved in the decision making, and both parties definitely need to “be-in the know”. It should be a partnership. Now more than ever, it’s important for women get involved with their long-term financial planning (not just the daily expenses). This is true whether you are in a happy, healthy marriage or a rocky one. So many women are in a terrible spot after a divorce or a death of a spouse. If you are single, these are also great questions to ask yourself.
Here are some facts:
Women are on track to control more than 40% of the worlds wealth by 2020, according to an article by Karen Demasters from Financial Advisor citing a S&P Global study.
According to article from Think Advisor, citing a UBS study: “82% of women think their spouses know more about long-term finances, citing this belief as their top reason for deferring.”
Women tend to outperform men in investing. In an article from Investor Business Daily, Elaine Low references several studies where women edged out the men. This is not noted for purposes of a victory lap, but rather a vote of confidence that women are more than capable to do the job.
76% of widows and divorcees in the study said they wish they had been more involved in long-term financial decisions while they were married according to an article from UBS. In addition, nearly eight in 10 urged other women to take a more active role.
Does this mean you should take the list and interrogate your spouse? Absolutely NOT. This will put everyone on the defense and ignite a tornado. Rather, talk about the big picture and the goal towards partnership before you get into the nitty gritty. Each of these questions bring up a big topic and garners its own discussion. This is a marathon not a sprint. And I do not recommend talking about these over spaghetti dinner with kids and dogs running around. Here are 12 questions to help get the discussion started around long-term financial planning.
What type and how much debt do we have? If so, should we put investing on hold?
Do we have an emergency fund?
Where is our money now? What banks and what type of accounts?
Where are our future dollars going? What type of accounts and where?
How much is going? What percent? Is this matched?
When is it going? Each paycheck automatically or manually?
Why are we choosing these accounts? (short term/liquidity? long term/retirement? Tax savings?)
When can this money be accessed? (are these retirement accounts or non-retirement accounts?)
Do we have life insurance? How much?
Do we have a living trust or will? Where is it? What does it say?
Do we have a college funds? Where are they and what is the plan?
What is the retirement goal(s)? Do we have a number? What is the plan/timeline?
I have been a long-time listener of Dave Ramsey who teaches the answers to all these questions. They cannot all be tackled at once and he breaks them down into 7 easy-to-understand steps. I listen to his free podcast while I’m driving, but he has classes and books as well. I do not work for him, nor am I affiliated. I just wanted to share a resource that I’ve used. No matter what route you take, the first step is to “be in the know”. You got this ladies!
