Personal Finance for Couples: 5 Things Both Partners Need to Know

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Couples Should Know the State of Their Finances

Couples Should Know the State of Their Finances

In many marriages, only one-half of the couple manages the finances. While delegation of duties may be a time management issue, it can be a problem when something happens to the marriage or the spouse who handles the money. Couples should be on an equal playing field when it comes to their finances.

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What’s Coming In and Going Out

Whether you are a one-income household or two, the first piece of the finances that both parties should be privy to is the total amount of income that is coming into the house. Different couples have different ways of documenting this type of information, but there are computer software programs, web-based systems or even simple spreadsheets that can help couples track the total income of the household each month.

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In the same system you choose to track income, both parties should also know everything there is to know about their expenses. This includes all of the money that goes out of the household. Not only should this include household bills, such as the utility bills and the mortgage, but it should also include credit card and loan payments as well.

Where Financial Documents Are Kept

Couples should store all financial records in one location. If you are still working with paper files, then you should have a file cabinet that is set up with files for each of the assets, liabilities, loans, taxes and important documents, such as life insurance policies. For couples who are looking to leave less of a carbon footprint, you may even choose to scan or store records electronically.

Whether you choose a paper or electronic system for storing your important papers or documents, make sure you have a backup system in place as well. For example, make copies of paper records and store them in a fireproof box. If you chose an electronic system, then create a backup on a CD or using an online backup storage system like Carbonite.

Information about All Investments

If you have any investment accounts, make a note of:

  • The investment firm with which the investment was made
  • Account number(s)
  • Financial advisor with whom you are working
  • Total value of account(s)
  • Types of investments in the account
This information should be stored in your chosen safe place.

Life Insurance Policies

In addition to income, expenses and investment information, both partners should also know about any life insurance policies. Again, knowing which insurance company holds the policies, the policy numbers and the value of the policies is pertinent information in the event that you have to access these accounts and your spouse is unable to advise you.

The Plan for “Just in Case”

As medical advances allow us to live longer, it’s also important for couples to make a plan for health insurance and long-term care. Identify whether health insurance and long-term care are covered by an employer or are individual policies, and make sure each of you knows what the plan is and how to access these policies when and if it is necessary.

In addition, in case something happens to you or your spouse, or both of you, it’s smart to determine who has power of attorney - i.e. who will act on your behalf and make decisions about your medical care, property and other private affairs. Different jurisdictions have different rules regarding power of attorney, so it’s important to find out what your rights are and make sure nothing is left to doubt should you, your spouse or both of you become incapacitated.

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Many couples choose to take on specific roles in a marriage. One spouse may be responsible for the finances, another may handle other household tasks. Even if this is the case, neither spouse should ever be in the dark. Make sure you and your spouse are communicating with each other regularly so one of you is never put in a vulnerable position not knowing the state of your financial affairs.

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