Girl Talk, Money Talk

When it comes to self confidence and assurance about your financial future, there is no excuse for you to take a back seat. In a 2015 study by Fidelity Investments, 62% of the women in their survey admitted they were at least a little confused about navigating their financial future and could use more knowledge to make smarter financial decisions. Financial education must start at a young age and it is a lifelong learning process, as the financial world is constantly evolving. Early on in your life your father may have handled all of your money matters. Even in college this may have been the case, and he was there to help you get your first job, buy your first car, and rent your first apartment. Sure, there are many activities you enjoyed better, such as social activities or planning your next vacation, so it was easy to let Dad handle the details. By the way, one statistic I heard years ago was that the average person spends more time planning their vacation than planning their finances! Then you get married, and husband or significant other takes over the finances. Easy for you, huh! Think again. You can not get lazy, or too comfortable, allowing someone else - like a father or husband - manage your money. If you idly let someone else control your purse strings, one day you may get seriously burned. You’ll need a major crash course in finances at what could be a very emotional and overwhelming time in your life (death of loved one, divorce, legal issue). Men and Women Approach Money Differently: In my professional experience, I often see men and women approach money from different angles. Men tend to focus more on growing the bottom line and paying less in income taxes. Women are more concerned about financial security and running out of money, or not having enough resources to provide for the wants and needs of the children. Women who have been burned before have a higher trust hurdle to overcome. This can be perilous when it comes to her finances, as if she's not willing to trust the person giving her advice, she'll take little action. With money, often some action is better than no action! These stereotypes are not always the case, they are generalizations of what I’ve witnessed over the past nearly two decades. Through your teenage and early college years, you probably went straight to your parents when you needed money, or money guidance. You may have found the advice you received from Mom was not exactly the same as Dad. In many households, the financial responsibility is often segregated, where one person handles the money and (hopefully) informs the other party. So one person may be more knowledgeable about money as they've had to deal with managing the money over the years. It's not always the man who runs the money, but even today that's the most common scenario I see. (That's not the case though in my house!) Know Who and What you Are Committing to: If and when you get serious about getting married or forming a long-term union, it's incredibly important to understand your future spouse or significant other's views on money. Did this person grow up privileged? If so, would they be able to cut back and live without all the extra if push came to shove? Can you? Are they debt averse, a speculative investor, and do they budget? You need to understand where this other person stands financially today. Are you marrying or committing into a mountain of student loans and credit card debt? Are you coming into the relationship on a stronger financial foot? If so, consider a prenuptial agreement and be sure any inheritance you receive is kept in a bank or brokerage account just in your name, for it could be subject to division in the event of a divorce. Know What you are Signing: Even if the decision has been made that your spouse/partner is going to be primarily in charge of the finances, here is a list of things you must stay on top of, to protect your financial future. 1) Tax return - understand what the numbers mean on your tax return before you sign it. Don't ever let someone force you to sign a joint tax return if you are not comfortable with the numbers, or they are not providing you all the pages in the tax return to look at. Or if someone is placing their hand over a section of the page you are supposed to sign, don't sign it! 2) Your will - understand who you are agreeing to give your money to, if you are to pass away. Every adult, even those in their 20s, should have a will, a financial power of attorney naming someone to make money decisions for you if you are alive but incapacitated, and a healthcare power of attorney to make medical decisions for you if you are incapacitated. It is your decision who to name as your agents, your executor and your beneficiaries. Your will and other legal documents don’t need to match your spouse or significant other! If you ever get divorced, you need to update these documents immediately. 3) Credit card statement - at a minimum, look at the balance once a month and know if you are paying in full, or why you are carrying a balance. Ensure the minimum payments are at least being made. If your name is on that credit account, and minimum payments are not being made, your credit score is going down the tubes. 4) Have at least two utility bills in your name, which helps your credit score, and ensure they are consistently paid on time. 5) Consider having your own bank account, even if it's small. That allows you to have some of your own money, keep using your own debit card, and ensures that in an emergency you get quick access to cash.