Bear Mountain Bull

“My Husband Takes Care of That”

Most women are insulted by, or at least leery of, the idea of handing over too much freedom to their husbands. But when it comes to their 401k and finances, I hear, “my husband takes care of that,” far too often. I hear it from women that work and I hear it from stay-at-home moms. All of these women are quite capable and many of them have graduated college. There is no reason for any of them to rely only on their husband’s decision-making when it comes to their finances. But…a lot of women hand it over anyway.

I’m not going to warn about “What if your husband died?” or “What if you get a divorce?” There are enough other reasons for women to stay involved in household and 401k investments. Even if a woman has never worked and doesn’t have a 401k of her own, she needs to know where the money is invested. She needs to understand the basic differences between bond funds, stock funds, CDs, money markets, and the amount of life insurance held. If for no other reason than to set an example for their daughters, mothers should be involved.

Women get married later in life these days and it can’t hurt to consider knowledge of investments in the same way you think of keeping up with a checkbook—it should be a basic requirement, not an afterthought.

Here are a few simple suggestions for women:

• Review 401k statements and be aware of where money is invested. It doesn’t matter if you have your own 401k or not—review his 401k. Consider the total and your current spending habits. Are the retirement accounts going to grow to be enough for retirement? If you aren’t getting there, should he (or both of you) be contributing more?
• Know the names of all banks or financial institutions that have any of your money, and where the statements and account numbers are kept. Does your husband let a financial institution or advisor invest money for you, or does he decide where to invest by himself?
• Know what types of investments you have. Even if you aren’t helping to select stocks, know which ones you own. Know how much cash you have. Know if your husband allocates a certain percentage to stocks versus bonds versus cash. Know if his investment plan is to buy investments occasionally or if he has automatic deductions taken from the checking account or paycheck and put into investments.
• Talk about investing with your husband and your children. Don’t leave out the girls. A lot of women (and young girls) don’t feel as comfortable with math as many males do. Don’t let this stop you from participating in investments.
• If your husband does have a financial advisor, go with him when he meets with the advisor. Know what the advisor charges for advice and don’t be afraid to shop around. Women are often better shoppers than men—and willing to put time into it.
• If your husband trades stocks, know which broker he uses and understand how to buy and sell stocks. Ask whether or not he trades on margin (borrowed money). Know how much money is in the trading accounts.
• Husbands: Encourage your wife to pay attention to the finances. Ask her opinion about stocks and explain your investment goals. Consider including high school children in the process of picking stocks. Let them help with research. Teach your kids to balance a checkbook, teach them how the mortgage process works, and the basics of investing—kids should know what a 401k is, how it is funded, and its importance in your future.

When it comes to money, a lot of women simply don’t want the responsibility. Other times, control is an issue. If the husband brings home the bacon—or the majority of it—he may feel he has the right to dictate where it is spent. I’m not going to argue the point, but even if he is making the decisions, there is no reason why other family members can’t take an interest. Be responsible—ask questions. Women need to know how much is being set aside for children’s education and retirement. Every woman should know whether or not there are savings for items such as cars, appliances or that new roof.

Don’t think the advice in this column will end all arguments over why he gets to buy new fishing tackle and you can’t buy that spiffy new outfit, but communication is the key to solving a lot of problems. Just remember: investments are your future too, not just your husband’s.

Article contributed by MES