It’s time to get organized financially, and believe me it is an effort at all levels.
I am very comfortable with the division of labor when it comes to money. We live in a busy world, and one spouse who takes money doesn’t mean the other is by default selfless or voluntarily avoiding chores. There is too much for a couple to deal with, especially with jobs and family, so if a spouse or partner raises their hand to deal with finances, from paying bills to investing for retirement. , we call it – managed.
The problem comes when there is a money communication division.
Except for ordering passports, the times we need to know things or get our hands on important papers like birth certificates or find that power of attorney or hunt down a life insurance policy, we are often in trouble. crisis. If we are the spouse who knows where everything is, no problem. But if we are the spouse in the dark, it can be a big deal.
This type of communication about money is different and in many ways easier than communicating about how and how much to save and how to invest the savings. Think of it as the logistics of money.
Susie Smith, a banking executive, saw the fallout from avoiding money logistics, especially for widowed and divorced women. She thinks spouses should meet semi-annually about their money. According to her, “Financial knowledge gives you peace of mind in addition to building trust between partners. I encourage each couple to regularly review their financial bases together ”.
Get into the weeds in the discussion. Who do we do business with for insurance or investment? How do you pay the bills? Do you write a check for this invoice? Is it written automatically? Are you using a credit card? Does this utility or lender communicate with you via email? In case of emergency, how to access your mailbox? Do I have an authorization on the account?
You could stop here. You can see the scenery, take some notes, and get on each other’s agenda six months from now. But what if you took it a step further and organized yourself together?
Serious disclaimer. Remember, I am a recent inductee to the Neat and Tidy Life Club. Although I can claim this title, it has been a fierce 40-year battle. All that to say that I am not naturally organized. Maybe it’s less of a warning and more of a promise. If I can find a way to hack ten years as a financially organized married person, then so can you.
My business partner, Tim Quillin, has developed an order of priority for the logistics of money called “PPOW” (passwords, papers, property and will / trust), and I recommend that you work on the list during each. of your biannual meetings (or get it out right away!).
- Passwords. As Susie Smith reminded me, in the past you could get away with not knowing what bills needed to be paid or where to find life insurance policies and investment accounts because they came in the mail. Think of it like paper bread crumbs. But we are in a largely paperless world where dreaded passwords come into play. If your spouse has a password keeper, there is your digital version of breadcrumbs.
All you need to do is get the master password from the password keeper. (Note to self: never lose it.)
When you log in, you can see every financial institution, credit card, and subscription in one place.
Go get a note and write the password on that note during your meeting. Then place it in front of the notepad you’re about to get for step 2. If you don’t have a password manager, I recommend Last Pass, but there are plenty of them. ‘excellent, like 1Password and Dashlane. Took about 2 years to get all of our passwords in Last Pass but now that they’re here my god it’s practically a religious experience just to open up the program and see all the passwords (correct) of every website I have to enter.
- Papers. Gather your important papers and put them in a notebook. Believe me, it doesn’t have to be fancy or perfect. I have a few tabs to make it easier to find, and they are: insurance (car, home, life), financial assets (savings and chequing accounts, retirement accounts, brokerage accounts, etc.), home (mortgage, deed , various guarantees), car (title, loan documents), important documents (birth certificates, social security cards, notarial will, health care power of attorney, power of attorney, etc.), then miscellaneous. Once you have your tabs, buy some clear protectors and go to town. Remember, for the most part, all you need is breadcrumbs. For example, of course, it would be nice to have your real auto insurance policy, but if all you have right now is just last month’s premium bill, add it in there. You can always replace it later. This notepad will only get better and more accurate over time.
One of the biggest questions people ask themselves is which mail to keep?
Most must be shredded or thrown away. People don’t have the problem to keep too little. They keep too much. Then it’s harder to find what’s important. With this system, you can simply replace returns as they arrive, using the transparent sheet protectors to make this task easier. And now you have the added benefit of eliminating that “pile” that you will surely come to “someday”.
Where to put the financial book? Yes, of course you can do that perfectly and buy the fireproof document storage. But the question to ask yourself is how likely is it that you will act quickly on this task? Also, what is the probability that a fire or a theft destroys this laptop? I am less concerned with the destruction of the notebook than with its loss. So I chose a shelf in my house for my nondescript notebook and told two family members where to find it. We are not moving it. Again, I’m less worried about someone stealing it or being destroyed than if someone can’t get their hands on it in an emergency.
The possession. What are your accounts called? This is not legal advice, but many estate planners recommend that you try to get both of your names on the accounts when possible. Update beneficiaries on retirement accounts. Of the 529s, consider taking an extra step to appoint a successor account owner.
Will or confidence. Make an appointment with a lawyer and just call him treated. Sure, they’re asking you to think about some pretty heartbreaking things, but we have to. I see parents agonizing over some of the questions about where children should live if something happens to them and a number of little details. All the while, the most dangerous reality is that in the months or years of indecision that pass, they cede all thoughtful decision-making to people who know their children less than they do while those wills or trusts. are retarded for perfection. To have. It. Ended.
“PPOW” all that. As soon as you have finished your cup of coffee and / or that column, turn to your spouse and ask to get a date on the calendar. Eliminate distractions, book a babysitter, and have your first business-side meeting of your life.
Sarah Catherine Gutierrez is Founder, Partner and CEO of Aptus Financial in Little Rock. She is also the author of the book “But First, Save 10: The One Simple Money Move That Will Change Your Life”, published by Et Alia Press. Contact her at firstname.lastname@example.org.