Monday, February 13, 2017

Money Skills and Spouses

Even in marriages where work is split 50/50, it’s common for just one spouse to take care of any individual job. This applies to money as well. A reader, D.L., wrote (with light editing):

My wife and I are in our 60's, retired, and financially pretty secure. I'm a self-directed investor. My spouse takes virtually no part in our financial life. Beside feeling that her math skills are weak, money problems were the cause of a lot of family stress when she was young.

So, I do everything from paying bills to investing. I don't resent this. She has tried to get more involved, but loses interest. This is probably less about financial illiteracy, and more about anxiety and avoidance. I would like to hear your thoughts.

As it happens, I’m currently helping an elderly family member sort out her finances after her husband passed. It’s been difficult. She wasn’t even sure which banks held her accounts. Her husband had taken care of everything money-related. Fortunately, he had decent paper records.

In my case, my wife used to handle paying all monthly bills, and I handled investing. To a first approximation, I handled anything that involved 5-digit amounts or more. She’s never liked making decisions about big dollar amounts. Over time, I’ve simplified my investment approach, and she has learned what I’m doing a bit at a time. At the same time, paying monthly bills keeps getting easier, and I’ve learned the various passwords necessary to pay the bills.

Ideally, D.L.’s wife should learn enough to take over if D.L. dies. However, it won’t do any good to show her this article and say “See. SEE!” She knows she should learn more about handling family finances, but it’s easy to procrastinate. And losing her husband is probably too difficult to even contemplate.

As a bare minimum, D.L. could write a letter to his wife or whoever helps his wife pick up the pieces after he’s gone. The letter would include account names and numbers and anything else that D.L. thinks might be helpful, such as his investment approach. Then he has to make sure he keeps it up-to-date and that his wife knows where it is.

Even better would be to slowly bring his wife into both the financial decision-making and the execution of decisions with online accounts. This would include paying bills and making trades. But, I do mean slowly. It’s tempting to go on and on explaining every little thing. It’s better to have a new 5-minute lesson every week or so. Maybe start with just logging into a chequing account and paying one bill. Keep it short and let her control the keyboard and mouse.

Over time, she will hopefully build confidence in both her ability to decide what needs to be done and how to do each step. But it has to be done slowly and calmly. I think D.L. should approach this process as collaborating with short lessons instead of anything remotely confrontational.


  1. I'm in a similar situation / have had similar thoughts. I have started to question whether assuming I can "teach" my wife how to manage this is the best plan.

    Another alternative I've considered is just to locate a trustworthy fee for service or fee-based financial planner, someone I would be okay with using myself (though I don't, because I manage my own investments). I could then simply leave a list of accounts/assets, with instructions that "should anything happen to me, call this guy".

    It could take a while to locate someone like that, but I think they are definitely out there. (Steadyhand, PWL Capital, Garth Turner, etc)

    1. @Anonymous: Makes sense. It's probably still a good idea to convey some of the basics, but finding someone trustworthy to pick up where you leave off makes sense.

      This reminds me of another problem I've seen twice now. In both cases the husband dealt with an advisor who seemed very good. Then when the husband died, the advisor started pitching inappropriate investments at the widow. Financial incentives can be powerful.

  2. Hey, this article talks about something really important! My wife and I have similar trouble when comes to managing money. Usually she pays monthly bills and I take care of investing and website monetization (we have some blogs/websites earning some money for us). If something happened with me today, she would know what to do about our investments, but she'd be lost about our websites. I need teach her slowly how to manage our blogs and websites. :-)

    1. @Christiano: If the revenue from the bogs is a significant fraction of your income, then this could be a problem. So far, all the examples are of women needing to learn something. Surely, there are some examples of men avoiding money decisions.