Alert
Close

Join us at AARP's 2015 Life@50+ National Event and Expo in sunny Miami.  Learn more

Highlights

Open

Introducing RealPad by AARP
You and Your Town Contest-You could win an AARP RealPad
AARP-iPad-ePub-app
AARP Auto Buying Program

Jobs You Might Like

Most POPULAR

Viewed

Financially Speaking

Handling Family Finances

Watch out if your spouse says, 'Honey, I'll take care of everything'

En español | I hate to say it of my gender, but women often don't pay enough attention to the family money. They're usually enabled by guys who like to manage things themselves. Both sides need to wake up. Family money is everybody's business.

I keep hearing stories about new widows, from traditional marriages, who gasp when they realize they'll now have to make financial decisions. And stories about husbands who lovingly say, "Don't worry, I'll take care of it," which doesn't prepare their wives for a life alone.

See also: Managing the family finances.

Couple reviewing bills - both husband and wife need to know how to manage family money

Married couples should become equally informed about finances. — Photo by Getty Images

Even younger wives might not know about their husband's investments or where the retirement income is likely to come from.

All too often, couples structure their household chores along gender lines — even if they both hold jobs. She does the cooking, and the laundry, handles the kids and maybe pays the bills. He decides on the insurance and investments, maintains the car and takes the garbage out. That makes no sense for either of them.

The issue comes to mind because of an email AARP forwarded to me. A woman misunderstood her coverage under her husband's retiree health insurance (he's in a nursing home) and mistakenly canceled the drug policy on the eve of her own cancer surgery. The company refused to reinstate her. Her children filed an appeal and, meanwhile, got her into Medicare Part D.

She recovered from the error. The company eventually reinstated her, so she is now able to choose between her old plan and Part D. Sometimes, however, mistakes can permanently change your life.

That's why both partners need to have a broad understanding of the finances, including husbands whose wives are the family wizards. The best way of learning is by doing. You might take turns paying bills. You each might handle part of the investments. By answering the following five questions together, you'll both be prepared.

1. What's your annual income and what does it cost to live? The first question on the mind of a widow (or widower) who hasn't paid much attention to money is, "Do I have enough?" It's terrifying not to know.

To forestall this shock, you and your spouse should create a budget file. Show all the sources of income available after the first spouse dies and the current annual amounts. Subtract your expenses, including taxes. That gives your survivor a road map, showing roughly how she (or he) should be able to get by.

To get your mind around how well you're jointly managing money today, consider signing up for one of the free money-management services online. You enter all your financial accounts — bank, investment, loan and credit card. The service tracks your income and outgo, and what your investments are worth.

Next: What to do with lump sums? >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

UPS Store membership discount aarp benefits

Members save 15% on eligible products/services, 5% on UPS shipping at The UPS Store®.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

Mujer en la parte de afuera de so negocio

Free quotes for members from the AARP® Small Business Insurance Program.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Explore Your Learning Possiblities