17 Feb Take Control of Your Finances Now, Have Fewer Regrets Later
By Tonya Graser Smith
When it comes to money, it pays to pay attention.
In my work as a divorce lawyer, I often see the negative effects of one spouse being in the know and the other spouse having ceded all control of or having paid no attention to the finances.
When people pay attention and are involved in their family finances, they recover more quickly in the event of divorce, according to the recent “Divorce and Money” study by Fidelity Investments. In fact, 80 percent of those who were not involved in their household finances reported feeling bad about it once they split from their spouse, and 40 percent of them said they have yet to recover financially from their divorce.
A recent story by Reuters recommends three ways to take control of your money so that you have fewer regrets if you later divorce. Even if you have the strongest of relationships, these steps – getting involved, communicating and getting a pre- or post-nuptial agreement – are worthwhile. What about when something else happens? Your spouse dies, becomes disabled or loses his or her job. I don’t mean to be a downer. But again it pays to pay attention.
Are you and your spouse aware of all the life insurance policies, retirement accounts, and maybe even Bitcoin or other crypto currency accounts?
Here are some specific actions I’d recommend when it comes to each of these three areas.
- Get a copy or your credit report.
The federal government requires each of the three main credit reporting bureaus to provide consumers with one free credit report every 12 months. You want to check all three, because what’s in each could vary. Some experts recommend spacing them out – getting one report every four months. But if that’s too much to keep track of then put an annual reminder on your calendar.
- Track household expenses.
Maybe you want identify areas where you might tighten up or maybe you want to plan for big expenses like a car, vacation or college bills. Pay attention to the details, tracking not just purchases by merchant, but by what was purchased. How many of us can say we’ve dropped $200 at Target (or anywhere) and at the end of the month have no idea what we actually bought? Of course, there are apps for this, and many of my clients have mentioned they like Mint.
- Teach your spouse.
When a spouse isn’t involved in the household finances, it might not be because of a lack of interest. It could be that there just isn’t time for both spouses to be interested or active in All Of The Things. One spouse might be good at budgeting and paying bills so that spouse handles the budget and pays the bills. The other spouse might take care of the investments or taxes, because that person is better at or more interested in those things. Here’s an idea though: Take time to teach each other about the family money matters that you handle.
- Take an inventory of accounts and assets.
What is titled in your name versus your spouse’s name? What accounts do you own together and jointly? Whose name is on the children’s 529 college savings plans? Where’s the safe deposit box located? What is your (and your spouse’s) income, including bonus, and how is it paid?
Knowledge really is power.
Getting a Pre- or Post-Nup
- Talk with a family law attorney.
Pre-nups are common when one or both spouses want to protect assets or business interests that they have when they enter the marriage. Post-nups are common when one spouse is added to a family business or becomes an owner in a business. Post-nups are also common when spouses have contemplated divorce, but are giving the marriage another try.
In North Carolina, a Board Certified Specialist in Family Law (like me) is the best for guiding you through the pre- or post-nup process. Family law matters are complex; you need a specialist. Your finances do not have to be complicated, and YOU can easily be the specialist in those!