It’s easy to become complacent about household finances, if your spouse handles everything. That’s why it’s so important for both partners to be involved with bills, investments and estate planning.
Women who struggle the most with adjusting to being widowed or divorced, are usually who those who haven’t been involved with family finances, according to Kiplinger in the article, “3 Things Married Women Need to Know About Their Money.”
They may not know how much money they have or if there’s enough to keep the household running after the loss of the main breadwinner. If they haven’t handled budgets and planning, they may not be at all confident that they can.
Women need to have a basic knowledge of how much money they have and how it is allocated. A 2014 study by Prudential found that 27% of married women say they “take control” of financial and retirement planning and manage it themselves. That means that 73% of married women do not. With this gap in knowledge, here are the three basic financial measures that all married women should know about their money:
Research Your Annual Household Income. Determine how much you and your spouse earn together. Review your income from investment accounts, jobs, rental real estate, pensions, Social Security and business investments. If there’s a divorce, the lists of assets and income are an important part of the property settlement. Review your tax returns from the past two years and keep a copy of each tax return going forward.
Understand Your Assets and Debts. At least once a year, make a list of everything you own. Don’t forget checking and savings accounts, 401(k) retirement plans, life insurance and real estate. It’s important to know your net worth, so next to each asset, make a note about any corresponding loans. An annual review also helps make sure couples don’t forget about any investments they may have made years ago, like a stock that may not be performing well. It is also important to determine ownership in each asset. This will be important, if your spouse passes away, and could affect the income tax you pay each year.
Do You Have an Estate Plan? If you and your spouse don’t have a will, talk to a qualified estate planning attorney and bring the household balance sheet to the meeting. If you’ve made a will, review it and make certain you know which assets you’ll inherit if your spouse passes away. You should also determine how much income will be available from life insurance and other sources to support you for the rest of your life.
The emotional loss of a spouse, or the end of a marriage, is tough enough. Add financial worries to it, and the burden becomes that much harder. Women who are accustomed to dealing with finances and estate planning, will be much better prepared to cope with their new lives as singles. Contact the Soto Law Firm today for a free consultation about your estate plan and to learn more about what you can do now to be prepared for important life events.
Reference: Kiplinger (March 13, 2018) “3 Things Married Women Need to Know About Their Money”
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