Longevity, marital breakdown are 2 big reasons women need to take charge of their finances

By Kathleen Peace, CFA, CFP

Special to the Financial Independence Hub

A recent poll by IPC Private Wealth among 400 affluent Canadians with at least $500,000 in investable assets revealed that 74% of men say they are the lead financial and investment decision-makers in their household. Among women, only 46% say they are the lead decision-makers.

Ladies, listen up! You are probably going to live longer than your male partner. On top of this, there is a 50% possibility that you will divorce your partner (with financial conflict being one of the reasons why). In either case, you will experience a large inflow or outflow of both investment assets and income. This eventuality means that being 100% cognizant of your family’s current financial situation is a must. Waiting to figure this out until after a spouse’s passing or marriage breakdown is at best reckless, and at worst, an enormous imposition on what will already be an emotionally taxing situation.

Let’s get on top of this. A Masters degree in Finance is not required. Gather information and open up a regular dialogue with your spouse. Both will go a long way to getting on top of your family’s pecuniary situation. Here’s how to get started.

Communicate, Communicate, Communicate

Enlist your partner’s help in becoming more aware of your financial situation. Given that money issues are among the top friction-areas for couples, keeping an open dialogue about how money is run in your family will benefit your marriage both fiscally and emotionally. Opening up this discussion is not always easy.

For many families, money is a taboo subject; in fact, many feel that the most difficult topic to discuss with loved ones is their personal financial situation (apparently they would rather discuss death, politics or religion!) An incredibly helpful resource for starting the money conversation with your partner: Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly about Finances and Live a Richer Life, by Kathleen B. Kingsbury.

Know your Advisor

If you don’t know your family’s financial planner/advisor, change this! Call them up and book a meeting to meet him or her. While the onus should be on the advisor to ensure that he/she knows all members of the family, a great many advisors do not. Do not let this deter you; it is their job to know you and act in your best interest. Let him know that you are interested and want to participate. Enlist their help in better understanding your family’s financial situation and improving your financial literacy. Any financial advisor worth their salt will be happy to have you join the financial conversation – the more she knows about you and your family, the better context she will have for her advice.

Not comfortable with your financial planner/advisor? Tell your partner. Consider together what you want from your advisor relationship. Start interviewing for a replacement. Check out these websites : Financial Planning for Canadians; Investment Industry Regulatory Organization of Canada, for listings of financial planners and advisors in your geographic area.

Don’t have a planner or advisor? Get one! A planner can help you to gain confidence, enhance your financial literacy, make a plan and stick to it. An advisor can also be a helpful catalyst and/or mediator for discussions with your spouse about those financial issues you may feel uncomfortable addressing on your own. Whomever you choose should be a champion, teacher and coach for both you and your partner in becoming experts on your financial lives.

Know your Accounts

Ensure that you have online access to all of your family’s accounts: yours, your partner’s, joint and otherwise. If paperless isn’t for you, monitor the mail coming in. Open envelopes from the bank, your financial advisor, insurance and mortgage companies.

Take 15 minutes each month to review financial mail as well as your family’s credit card charges and chequing account activity. Do this with your partner. Over time, you will learn:

1.) How much money is coming into your household

2.) How much money is leaving your household

3.) What it’s being spent on, and

4.) How much — if any — is being saved

This knowledge will allow you to become better involved in the family money conversation. It will enable you to bring an informed opinion to the table about spending, saving and paying down debt.

Bottom line, ladies: Relieve yourself of the burden of sudden disclosure later in life by gathering information, learning and communicating now. The importance of mastery over your financial life is only going to grow. Engage yourself in your family’s economic affairs and gain a stronger grasp on your future.

Kathleen Peace, CFA, CFP, is a Senior Financial Consultant, IPC Securities Corporation. Kathleen specializes in Socially Responsible Investing, financial issues associated with divorce and executive compensation. Working with private clients and corporate executives, Kathleen is adept at thoughtfully guiding clients through the financial planning process. This ensures their comfort and understanding of the outcome and ongoing execution of their plan. Beginning her career in foreign exchange on Bay Street, Kathleen spent 5 years in emerging markets on Wall Street before returning to Toronto. After a stint in social services, Kathleen decided that one-on-one client relationships would be the focus of her career and as such, joined the firm in 2004. Kathleen completed her BA in economics at Dalhousie University and has been a CFA Charterholder since 2001.