Are you in the loop with your family finances?

When last did you have a good old chat with your beloved about your dreams for the future? We’re not talking the road trip you’re going to take across America or the hobby room you can make when your youngest flies the nest. In hard rands and cents, how will you pay for life when you can no longer work? What would happen if, heaven forbid, one of you isn’t there one day?

Attitudes about money are deeply ingrained in us over many generations. Some think that ‘money silence’ is completely normal. Others were taught that it’s good to be ‘rescued’ financially. The bottom line is that women live longer, earn less and save less for retirement than men. And usually men make the decisions about insurance and investing.

So who is looking after that dream future for you? Ask yourself how often you’ve heard this in your house:

“Is that horse riding lesson/ hip-hop class/ surfboard / …... (add yours here) really necessary?”

Does your partner know how much it really costs your family to live? Women tend to be in charge of the household budget as well as those never-ending children’s expenses like extracurricular activities, clothes, gifts, parties, medical bills, remedial therapy, etc. All those art classes, OT sessions and can-I-have-a-milkshake-mom’s should be accounted for. Why? Because when it comes to things like life insurance, there needs to be a crystal clear visual on what your family needs to continue its way of life. Not a guestimate; if anything an overestimate. In other words, you have to be part of this conversation, without feeling guilty or ashamed of these (sometimes deemed frivolous) expenses.

“Hey honey, let’s have our monthly finance meeting.”

Ever had a family budget meeting? A business has to be run like a well-oiled machine and a family is no different. If your hubby is the MD of a successful company, then he’ll be used to managing a P&L (profit and loss), doing cashflow forecasts, having regular stakeholder meetings and so on. A family too should have a formal plan for expense management, strategies to increase its income and regular meetings to check its progress. Is that happening with your ‘business’?

“I’ve talked to my broker, don’t worry, we’re sorted”

Do you feel that he is making the money so he should choose how to invest it? Remember we talked about running family finances like a business. Say one of the shareholders took a sabbatical to look after the assets (the kids), then the business should absorb that loss of income. The business won’t stop to paying this shareholder dividents. So while it’s perfectly normal to bank separately, financial planning should always be a team effort. Just because you’re not contributing cash, doesn’t give you a lesser say about your financial future.

“I think it’s time we took stock of everything we own.”

You had a prenup but when last did you have a during-nup? When you’re young and in love, communication about money is open and honest. You know exactly who owns what. But over time, you have kids, businesses get built up, second (and third, and forth…) homes are bought. It’s a good idea to get a spreadsheet going of all your assets, debts and financial commitments, and decide as a couple how to best protect these.

“We have our house and my RA, we’ll be okay for retirement.”

It’s a fact that women generally outlive men. The average 65 year old woman can live to to be 89, which means that you’ll have at least 20 years to live off that pension or RA – possibly 30 years if you keep doing your Pilates, eat well and stick to one glass of red a day! Will you have enough to live on? Will you be able to manage your finances on your own? And shouldn’t you get a say in how those assets grow?

The point of these questions is not to alarm you but to give you an opportunity to take stock of your family’s financial health. We know that life is busy and that often couples delegate responsibilities. However you divvy up the financial planning, just make sure you know what the other is doing.

Come in and see us if you want to educate yourself on financial matters and chat about this together. It’s important to invest the time in this important part of your relationship. Working with a financial advisor gives you a neutral place to talk about money and plan together as a team. Call 021 434 8065 or drop us a line at ivan@gfb.co.za and let’s book some time for a couple’s chat.