Professional women often earn good money and make their own decisions about spending, saving, investing and protecting their wealth. But some marry, or enter a defacto relationship, and relinquish some financial control along the way.
This loss of control usually creeps up, insidiously and unintentionally, over many years. Then one day – if they’re lucky — they wake up and realise they’ve become dependent on their partner managing the family funds. Even where a woman is earning as much or more than her partner, it can happen. It’s one thing to earn money; it’s another thing entirely to manage it effectively.
By not staying actively involved with what happens to your money, over time you place yourself in an incredibly vulnerable position.
If disaster strikes — your partner is killed or becomes disabled and is unable to make decisions — or if you decide to divorce, you will have no option but to take the reins once more, and it will make the world of difference if you have the know-how to do so easily.
Nobody likes to admit that they’ve taken a back seat on the family finances, especially well-educated and highly intelligent women – but this sort of thing happens to the best of us, as author of the best-seller Money, A Memoir: Women, Emotions, and Cash Liz Perle discovered.
She moved to Singapore with her husband and their four-year-old son, where her husband announced, shortly after they arrived, that he longer wanted to be married. Despite having forged a successful career as a publisher and editor, Perle found that at some point she had handed over financial control to her husband.
With very little idea on how to manage money and control her financial future, she learned the hard way that because she had not kept herself informed on the money front, starting over was incredibly scary and more stressful than she ever could have imagined.
For all Women’s Agenda readers, here’s a short quiz to assess if you have a handle on your finances:
- Do you know exactly how much money you owe and to whom?
- Do you know when you’re going to pay off this debt and what the repayment plan is?
- Do you know how much you have in your superannuation?
- Do you know how much you need to save by retirement age to live the lifestyle you would like to?
- Do you know how your superannuation is invested? You may need to think back to the box you ticked when you set up your account.
- Do you know what insurances you have, with whom and how much you’re insured for?
- Do you take active involvement in reviewing your insurances every year?
- Do you have full access to the family bank accounts and mortgages?
- Do you know how all your family money is invested – what money is in shares, property and other investments?
- Do you know where you’d like to be financially in the next year, the next five years, ten years and twenty years?
- Do you have a plan to get there?
If you answered no to more than three of these questions, it might be wise to take the time to understand your own finances.
The famous poem Desiderata advises us to, “Keep interested in your own career, however humble; it is a real possession in the changing fortunes of time.”
I would add to this: don’t just keep interested in your career and in earning the money, also keep interested in how you manage those hard-earned dollars.
The bottom line is that women need to be vigilant in taking an active interest in their finances and not defer to their partner – no matter how strong the relationship, because we just never know what tomorrow holds.
Remember, it’s your life so if you’re uncertain or feel that you lack knowledge, then take responsibility and educate yourself – read up, take a course, speak to a professional.
Above all, insist on being equally involved with all money matters in your relationship — don’t ever rest on your laurels and let your partner do it all.
*Claire Esmond is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.