Just as it’s common for our families to have “Dr. Mom,” it’s also common for one spouse to serve as the family’s Chief Financial Officer (CFO). The family CFO takes the lead in paying bills, making investment decisions, selecting insurance policies and employee benefits, etc. This division of labor is common because one spouse may have more interest in financial matters, and the set-up works fine - as long as both spouses are physically and mentally healthy.
As you know, our health is not guaranteed, which was the case with a couple I’ll call Pierson and Nancy. Pierson and Nancy were married over 50 years, and Pierson handled all their financial matters until he got sick and subsequently died. Nancy was at a loss as to where to find Pierson’s will or how the power bill as paid. This lack of knowledge about her finances made an already stressful situation worse. Her experience also made me realize how critical it is for families to have regular money talks to make sure financial information is shared. An ounce of prevention is worth a pound of cure.
These money talks can be between husband and wife or between an elderly parent and adult child. We know that, in cases of cognitive impairment, financial skills can be one of the first to decline. It may be helpful to schedule a time to have this conversation, so the other party doesn’t feel like you are springing the topic on him/ her. If you’re talking to your parent, you may also want to reassure mom or dad that you’re asking for information because you want to help, not because you are trying to take over their finances.
Here are five questions to ask during your family financial conversation:
Pierson and Nancy did so many things right in their 52 years of marriage, but please don’t follow their example when it comes to communicating about family finances. Schedule your own family financial conversation.
Patti Black, CFP® is a financial planner and a partner with Bridgeworth LLC.
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