Know your family finances

[Xantippe]

I was just reading this post on the need to understand your family’s finances. It’s old (from 2013), but a lot of couples struggle with money and it’s a good summary of the basics, so I thought I should share:

“Whoever pays the bills emails or prints out a status update twice a month of how much is in the bank, how much you owe, and how much you have. It doesn’t have to be elaborate–just a snapshot so that you both know how tight money is–or isn’t.”

Twice a month is possibly overkill–we do a monthly budget meeting and it’s fine. But I have the running tallies out and available for inspection.

There’s a lot more helpful stuff here:

tolovehonorandvacuum.com/2013/03/wifey-wednesday-dont-be-in-the-dark-about-your-familys-finances/

I’d add that not telling your spouse about bad financial news is not actually a loving or protective thing to do–quite the reverse.

As Gregoire points out, the bill-paying spouse needs to keep the non-bill paying spouse in the loop. It is important to avoid a situation where the money-spending spouse is not fully aware of the financial situation.

 

[BlueEyedLady]

My parents (old-fashioned, they don’t do anything online) throw all the bills every month into a basket in the kitchen, and at the end of the month they sit down with their checkbook, a calculator, and copies of their bank statement and previous months bills and pay everything together. They compare how much they’re spending on each utility to the months (and years) before. They keep track of every last cent and they make sure that every bill gets paid. My parents are extremely poor, so this is a necessity for them. But it also ensures that they are both on the exact same page based on the facts of their current financial situation. They have had very few conflicts related to money because of this. It’s a system that my husband and I use too, and like my parents, we rarely have issues.

 

[styrgwillidar]

I was just reading this post on the need to understand your family’s finances. It’s old (from 2013), but a lot of couples struggle with money and it’s a good summary of the basics, so I thought I should share:

“Whoever pays the bills emails or prints out a status update twice a month of how much is in the bank, how much you owe, and how much you have. It doesn’t have to be elaborate–just a snapshot so that you both know how tight money is–or isn’t.”

Twice a month is possibly overkill–we do a monthly budget meeting and it’s fine. But I have the running tallies out and available for inspection.

There’s a lot more helpful stuff here:

tolovehonorandvacuum.com/2013/03/wifey-wednesday-dont-be-in-the-dark-about-your-familys-finances/

I’d add that not telling your spouse about bad financial news is not actually a loving or protective thing to do–quite the reverse.

As Gregoire points out, the bill-paying spouse needs to keep the non-bill paying spouse in the loop. It is important to avoid a situation where the money-spending spouse is not fully aware of the financial situation.

Well, I’m single and have three kids, two still dependent on me with one being a minor and the other in her first year of college (third lives with me but has completed school and her teaching credential and launching her career) and it goes beyond couples. My kids certainly don’t need to know about my finances, but what if I die?

Everyone should give serious consideration to having a detailed financial summary for whoever the executor/trustee of your estate/trust will be. All the accounts that need to be paid with account numbers, example of the bill, and how you’ve been paying them. Outstanding loans, bank accounts, retirement accounts, insurance policies and who to contact about them since some may be through the employer. Web account access details etc. etc.

 

[FrenzyJen]

We use a budget program called YNAB that’s synced with our smartphones and computers. We create a unique budget prior to the start of each month, considering that month’s unique circumstances, like trips, things we need to buy or special activities. From our phones we are able to see how much money is available to spend in any given category, and we are able to (name removed by moderator)ut purchases as we make them.

I’m a big fan of Dave Ramsey (his radio show and books) and I love the sense of peace that I have knowing my finances. No more feeling nauseous waiting for the bank website to load so I can see how much money isn’t there, hoping that I have enough for the bills. IT has removed a lot of stress from our marriage as well. We spend more time talking about money rather than being stressed and irritable towards each other not talking about money.

 

[Burt_Macklin]

I have everything on auto pay and then give my wife the leftover cash at the end of the month. It is much easier for her to keep up with cash rather than worry about keeping up with expenses on a card. I try to live on my salary only and then use any bonus or hazard pay (which makes up about half of my salary) to put in savings or give to charity.

The only thing that would be nice is knowing what to expect from parents and in-laws. My in-laws haven’t filed a tax return in about 4 years, so I’m not sure what to expect with that. I don’t know if they plan on moving in with us within the next 5 years, and at this point I’m too afraid to ask.

 

[Xantippe]

Well, I’m single and have three kids, two still dependent on me with one being a minor and the other in her first year of college (third lives with me but has completed school and her teaching credential and launching her career) and it goes beyond couples. My kids certainly don’t need to know about my finances, but what if I die?

Everyone should give serious consideration to having a detailed financial summary for whoever the executor/trustee of your estate/trust will be. All the accounts that need to be paid with account numbers, example of the bill, and how you’ve been paying them. Outstanding loans, bank accounts, retirement accounts, insurance policies and who to contact about them since some may be through the employer. Web account access details etc. etc.

When my husband and I did our last will we also sent a letter to my in-laws (they would have to raise our kids in case of our untimely demise) explaining how much life insurance we carry, where our important documents are (we keep all key items including passports in a fire-proof safe), etc.

A different grandpa was chosen to be in charge of disbursing money to the guardians, and he got a letter at the same time with the same information.

I’ve heard at least one story where a family struggled and struggled financially after the death of a father, only to belatedly discover that there actually was a life insurance policy.

 

[Xantippe]

The only thing that would be nice is knowing what to expect from parents and in-laws. My in-laws haven’t filed a tax return in about 4 years, so I’m not sure what to expect with that. I don’t know if they plan on moving in with us within the next 5 years, and at this point I’m too afraid to ask.

Ay yay yay.

We had one set of parents in our family that dragged their feet for a long, long time about making a will and had a million excuses for not doing it (despite having involved finances, large assets, large debts, and a disabled child to provide for). They finally did a will this past year, much to our relief.

 

[pensmama87]

It can be hard when the non-bill paying spouse doesn’t show much interest in being in the loop. I do all our finances, but he has access to everything anytime he wants (we do online banking and bill pay, and our day to day expenses are with cash. I do keep receipts to reconcile and check pricing trends.) I’ve tried doing the monthly budget meeting thing but he just doesn’t care - though at least he asks me before making purchases not with his “fun money.” He figures I can handle it - which, OK, thanks, but what if I die?

For us, this applies to more areas of our lives than finances. I am a “prepare for the worst” type, and he is a “nothing will go wrong if we don’t think it will” type. He finds it morbid to discuss things like what happens if one of us [or both of us!] dies. As it is, I have a binder I’ve been putting together detailing how I run the house. He thinks it’s primarily for me, and I do use some of the things in it for reference, but actually my main thought is that if I die, and if he thinks to look in it (big “if”), there’s a chance our kids won’t be raised in rags eating McDonald’s every day.

As it is, I’ve been waiting for two years for him to list a beneficiary on a life insurance policy, and three years for him to do something with an old pension account that has been sitting there losing money ever since he changed jobs. I try not to nag, but ohhhhhhh, it’s hard! Plus when I do give in and nag, he still doesn’t call.

 

[signit]

The only thing that would be nice is knowing what to expect from parents and in-laws. My in-laws haven’t filed a tax return in about 4 years, so I’m not sure what to expect with that.

This is something that should be taken care of immediately. It can only get worse.

They should file all back tax returns and pay any taxes due. If they can’t pay, they might be able to pay on an installment plan or get some other type of tax relief.

Be very careful; the IRS has warned about unethical behavior by “tax resolution” firms.

Ay yay yay.

We had one set of parents in our family that dragged their feet for a long, long time about making a will and had a million excuses for not doing it (despite having involved finances, large assets, large debts, and a disabled child to provide for). They finally did a will this past year, much to our relief.

There are plenty of stories about people who don’t have a will and in the end the wrong person gets everything.

My mother’s friend never got around to making a will. She never married and had no children and wanted to leave everything to her church and/or charity, but as it turned out it all went to a distant relative she hadn’t seen in years.

 

[Xantippe]

It can be hard when the non-bill paying spouse doesn’t show much interest in being in the loop. I do all our finances, but he has access to everything anytime he wants (we do online banking and bill pay, and our day to day expenses are with cash. I do keep receipts to reconcile and check pricing trends.) I’ve tried doing the monthly budget meeting thing but he just doesn’t care - though at least he asks me before making purchases not with his “fun money.” He figures I can handle it - which, OK, thanks, but what if I die?

For us, this applies to more areas of our lives than finances. I am a “prepare for the worst” type, and he is a “nothing will go wrong if we don’t think it will” type. He finds it morbid to discuss things like what happens if one of us [or both of us!] dies. As it is, I have a binder I’ve been putting together detailing how I run the house. He thinks it’s primarily for me, and I do use some of the things in it for reference, but actually my main thought is that if I die, and if he thinks to look in it (big “if”), there’s a chance our kids won’t be raised in rags eating McDonald’s every day.

As it is, I’ve been waiting for two years for him to list a beneficiary on a life insurance policy, and three years for him to do something with an old pension account that has been sitting there losing money ever since he changed jobs. I try not to nag, but ohhhhhhh, it’s hard! Plus when I do give in and nag, he still doesn’t call.

Gaaaaah!

1. I like your binder idea. If it’s big enough and you explain often enough what it is and keep it in a visible location, he’ll find it in the case of your untimely demise.
2. Can you get him to do a short budget review every month after you put together the budget?
3. A small life insurance policy on you could be a good idea. The one we have on me is big enough to pay off our mortgage and bury me, plus a little more. Without a mortgage, there would hopefully be plenty of money freed up for extra childcare and carryout.
4. Don’t let this week pass without that life insurance getting assigned to you. Also, you are expecting another kid. Perhaps it’s time to up his life insurance?
5. It’s not nagging if you remind him at a time when he can do it right away and you provide him with all of the information and documents he needs to the insurance paperwork. (The same applies to the old pension, but the insurance is more important.) I’m the spouse that deeply dislikes doing things like that, but if it’s all set up for me, with an explanation of what I’m supposed to do, I can do it.

Good luck!

 

[Xantippe]

Be very careful; the IRS has warned about unethical behavior by “tax resolution” firms.

Yeah, I hear very scammy radio ads for that all the time.

 

[Kelfa28]

Hubby is in charge of our finances.
We have one joint account that we use together to pay bills. I have total access to it if I want but he does the bill paying.

Even if I was a SAHM and he was working full time…he’d still do all the finances. I’m terrible with money. I’ve gotten far better at it since we’ve got married and my credit score has improved quite a bit but I just have no interest in it and I know if I was in charge of finances…everything would be unorganized and I’d mess everything up.

I told my mom this and she was almost floored and couldn’t believe that I’m entirely dependent upon my husband when it comes to finances.

She and my dad have always kept separate accounts and have paid bills separately their entire marriage. I don’t think they every had a joint account. Dad paid the mortgage and mom paid for everything else.

Everyone does it differently but if you communicate with each other and keep everything out in the open and not hide finances…then you shouldn’t have issues.

Hubby and I try to keep things simple. We don’t have much debt between us at all. No credit card debt…whatever is used on the card is paid off almost immediately. We also don’t have a lot of things on loan. With the exception of one car and our mortgage…everything we’ve ever bought on credit has been paid off in full as soon as we could.

 

[Burt_Macklin]

This is something that should be taken care of immediately. It can only get worse.

They should file all back tax returns and pay any taxes due. If they can’t pay, they might be able to pay on an installment plan or get some other type of tax relief.

Be very careful; the IRS has warned about unethical behavior by “tax resolution” firms.

I’ve told them they need to take care of it but I can’t really force them to. At this point I don’t think they have any record of how much they earned so they are afraid to even start. All I can do is sit back and wait.

 

[styrgwillidar]

Gaaaaah!

1. I like your binder idea. If it’s big enough and you explain often enough what it is and keep it in a visible location, he’ll find it in the case of your untimely demise.

Good luck!

Yep. My Mom had a binder Labeled “When I’m Dead” and all us kids knew where it was. We didn’t know she’d changed trustees/executors several times. Mostly based on which of her kids was living closest to her- some of us moved out of state at various times. Had not only her complete finance and important paperwork, but also very, very detailed instructions for her funeral right down to the readings, music, and when to close the coffin.

As for getting him to get a beneficiary listed. You both need to sit down and understand where the insurance money will go based on what’s listed right now. Not uncommon in the military for someone to die and find out they never changed the beneficiary from their mother/father to their spouse when they got married. Or worse, from their ex-spouse to their current spouse. Insurance companies hands are tied- they have to pay it out as listed. Maybe if he understand a bit more what the implications are he’ll have a reason to get this done.

Nightmare for me was my Mom listed me as the single beneficiary for her IRA account. Problem is (well- biggest problem was it was with BofA, I can not say enough bad things about that company) there were six kids and her trust indicated splitting everything equally. I know she didn’t want me to have that account solely. Big headache in figuring out how to decline as beneficiary and getting it paid into the trust/estate so I could split it. Had some tax implications and eliminated some options that better planning would have prevented.

 

[MyLittlPwn13]

I was just reading this post on the need to understand your family’s finances. It’s old (from 2013), but a lot of couples struggle with money and it’s a good summary of the basics, so I thought I should share:

“Whoever pays the bills emails or prints out a status update twice a month of how much is in the bank, how much you owe, and how much you have. It doesn’t have to be elaborate–just a snapshot so that you both know how tight money is–or isn’t.”

Thanks for sharing! I’m the bill payer in our house. I print a copy of our spending plan every other week, then I highlight items as they’re paid. This is posted on the pin board inside the front door, so everyone knows the status of our money. Bonus: My 16-year-old can see it too, so he gets a feel for how this is done.

It can be hard when the non-bill paying spouse doesn’t show much interest in being in the loop. I do all our finances, but he has access to everything anytime he wants (we do online banking and bill pay, and our day to day expenses are with cash. I do keep receipts to reconcile and check pricing trends.) I’ve tried doing the monthly budget meeting thing but he just doesn’t care - though at least he asks me before making purchases not with his “fun money.” He figures I can handle it - which, OK, thanks, but what if I die?

Mine is like this too, but putting it all where he can find it and informing him of what’s there is good enough for me. I have enough trust in him to know that he’ll step up if and when needed. Division of labor and all that sort of thing

I am absolutely dreading the “What are you doing to prepare for retirement” conversation with my parents. Pray for me.

 

[Xantippe]

Yep. My Mom had a binder Labeled “When I’m Dead” and all us kids knew where it was. We didn’t know she’d changed trustees/executors several times. Mostly based on which of her kids was living closest to her- some of us moved out of state at various times. Had not only her complete finance and important paperwork, but also very, very detailed instructions for her funeral right down to the readings, music, and when to close the coffin.
**
I’ve always thought that planning the funeral is a very thoughtful thing to do.**

Nightmare for me was my Mom listed me as the single beneficiary for her IRA account. Problem is (well- biggest problem was it was with BofA, I can not say enough bad things about that company) there were six kids and her trust indicated splitting everything equally. I know she didn’t want me to have that account solely. Big headache in figuring out how to decline as beneficiary and getting it paid into the trust/estate so I could split it. Had some tax implications and eliminated some options that better planning would have prevented.

Yes. I think there can be some big problems when what a person thinks they are doing legally is different from what they’ve actually done.

One of the grandmas in the family thought she was leaving her apartment to her son and grandson (this was in Central Europe) and made a will to that effect. Problem was 1) her will wasn’t legal enough and 2) she’d already made other arrangements that meant that her third husband owned half of the apartment. What with one thing and another, that all meant that she was considered to have died without a will, which meant that of the remaining half of the apartment that didn’t belong to her husband, half would go to her husband and half to her only living son. So instead of the son getting half and the grandson getting half, the husband got three quarters and the son got one quarter. But actually, the son got nothing, because it wasn’t worth fighting over 1/4 of an apartment in provincial Central Europe. The grandson also got nothing, rather than half of the apartment.

 

[signit]

I’ve told them they need to take care of it but I can’t really force them to. At this point I don’t think they have any record of how much they earned so they are afraid to even start. All I can do is sit back and wait.

It’s good, at least, that you realize that.

If someone doesn’t file for a few years the penalties and interest pile up and can get astronomical. And there’s no statute of limitations if you haven’t filed; the IRS can go back any number of years.

In the worst case they could go to prison for nonfiling, but that’s not likely if they at least file before the IRS initiates criminal proceedings.

If there’s a problem with records, the data can be reconstructed or even estimated. The IRS can provide them with data from 1099 forms and the like. The request for data from the IRS will not trigger a proceeding against them.

If they’re not comfortable trying to solve the situation themselves they should get a reputable tax professional (CPA and/or enrolled agent), preferably someone who specializes in this sort of thing.

 

[JoeFreedom]

I was just reading this post on the need to understand your family’s finances. It’s old (from 2013), but a lot of couples struggle with money and it’s a good summary of the basics, so I thought I should share:

“Whoever pays the bills emails or prints out a status update twice a month of how much is in the bank, how much you owe, and how much you have. It doesn’t have to be elaborate–just a snapshot so that you both know how tight money is–or isn’t.”

Twice a month is possibly overkill–we do a monthly budget meeting and it’s fine. But I have the running tallies out and available for inspection.

There’s a lot more helpful stuff here:

tolovehonorandvacuum.com/2013/03/wifey-wednesday-dont-be-in-the-dark-about-your-familys-finances/

I’d add that not telling your spouse about bad financial news is not actually a loving or protective thing to do–quite the reverse.

As Gregoire points out, the bill-paying spouse needs to keep the non-bill paying spouse in the loop. It is important to avoid a situation where the money-spending spouse is not fully aware of the financial situation.

My wife and I have our method and it works for us. We both implicitly trust each other, which is the first step. Since she does not like to do, or is good at doing, the finances, I do it. Which is great, because I thoroughly enjoy it. We share one bank account, and she has access to everything, account information, passwords, balances. I am the one who manages the money. We both like it this way. Money seems to not be an issue or problem in our household. She knows I make the best decisions for her, myself and our family. They are always Godly decisions, and she is aware of anything major. I always ask her (name removed by moderator)ut on things which affect us both, but not so much as to buy this stock or that bond. She gets to have her (name removed by moderator)ut weighed, equally to mine. But because she isn’t as savvy with such things, I can be the ultimate arbiter of long-term financial decisions, because she knows that it is not to “control” the money, but to do what is in both of best interests (and our kids). It’s truly hard to describe how while I am in control, I still serve her, if that makes any sense.

Sorry, I don’t know if any of that helps you or not, but you need to work out what works best for you and your spouse/family and come to a mutual agreement. Whatever that may be. Money can be the root of evil and can have devastating consequences if not handled cooperatively together in mutual agreement.