A majority of the India households have the finances driven by the male counter part. That does not mean they are driven smartly. Women can manage finances equally well, its just that its often a boring activity and women would prefer something better going on at the soap operas. And in houses where the women is in the driver’s seat, well, the husband is out with his friends. But there are occasions that can force either spouse to look at the household finances. Let’s take a look at 4 such reasons.
1. Who will handle the finances in case of emergency ?
In cases where one spouse handles all investments and finances, if there is a medical emergency and the other is forced to look at the finances, he/she will struggle with the hows and whys as he/she has been unaware of the financial dealings. For example, if the husband has made an emergency fund or health corpus to be used in case of urgent hospitalization and the wife is unaware of it, the family will possibly liquidate an investment meant for other purposes. The husband would not really be pleased with this decision when he is back from the hospital.
- Make your spouse aware of where the emergency corpus is and what he/she should do to liquidate it.
- Make your spouse aware of where the will is.
- Make your spouse aware of all bank accounts, DEMAT accounts, loans, credit cards and all major financial deals.
2. Household budgeting is the cornerstone of saving and investing
Your better half needs to understand the basics of budgeting. Its a very basic concept and it helps both couples plan their spending and therefore savings. For all your financial goals in life, you need to save and invest. That is possible only if you budget and spend according to the budget. And that cannot be achieved by one of the two partners alone.
A healthy financial plan is the result of a healthy mix of budget discussions between the husband and wife.
Discussion can unravel things which the spouse is not aware of. For example, its only after discussing with my wife did I know she wanted to celebrate her mom’s birthday and so we budgeted for it. (I might still get my breakfast today if she happens to read this later in the day).
3. All financial goals in life are planned better together
The decision of when to retire cannot be made by the husband or wife alone. Its a joint decision. Like retirement, all important financial goals in life like when the children will go for higher studies or get married, when the couple need to take a foreign vacation or when to retire are best taken together.
Discussing financial goals in life imparts financial inclusion in the decision making process making both accountable for all decisions taken. The responsibility is shared, as are all successes and failures.
Goals not planned together will call in for debate at a later point in time – for example, if you have planned a foreign vacation after 5 years and your wife is expecting one next year, you’d be better off discussing it so that it can be planned better now than fighting about it later.
4. Educate your spouse about finances and how you handle it.
Most of the spouses do not participate in finances because they do not understand the basics. If that is the reason, start educating him/her on the basics of how to handle money. Surely, you were not born with the art of money management yourself. If you learned it, so can he/she. I am sure we all think of making our children smart; so why can’t we first try and do that with our spouse ?
Teach your spouse about how you handle finances. Give him/her responsibilities that she can run with. Mistakes are bound to happen. But isn’t that something which we humans always make ?
You might even have to provide baby steps to teach your spouse the basics, for example, how to log into the DEMAT account.
To conclude, if you choose to shop for clothes for your kids together, if you choose to watch your favorite movie together and if you choose to fight together, there is no reason why you cannot manage your finances together. It’s surely going to come in handy someday.
And I’d let you know later how my breakfast went !
Yo have nailed it well. My husband manages all my finances and I don’t have a clue.
Shilpi, you need to get involved then. Whats stopping the participation ?
I agree that couples should decide on their finances together. My wife does not tke interest at all.
Deepak, many wives don’t. Isn’t there a way you can motivate her ?
well well well. this looks like an ideal case you want to be in Radhey. I don’t know of any household where both husband and wife do finances together. i think its a waste of time if they do together. why not free up that time into somethign mroe useful ?
Joshi, there are many households doing it as you might see from the comments here. Do not consider it as a waste of time. How do you suggest would the wife know of finances if the husband were to become say, hospitalized for a month ?
Good article. I started involving my spouse since 7-8 months and regrets why didn’t started earlier 🙂
she is now able to manage the household finance alone, I just transfer fixed amount every month in starting. In simple Excel spreadsheet we are able to see from where our pennies are coming and going.
Jagbir, this is exactly what I do too ! This is the only way I can get my better half involved. Otherwise, I have to manage all finances.