It’s Called Currency

If you have a partner in your life—a spouse, someone you live with as a committed couple, anyone who affects or is affected by your financial decisions—please do everything you can to make sure that both of you stand on equal footing when it comes to money. By “equal footing”, I don’t mean that you have to both work and earn the same amount of money in your paychecks. Equal footing is when you both know everything about your individual and joint financial situations and you make decisions for the present and the future together. It is not when one of you earns the pay and the other receives an allowance determined by them because “it’s my money and I will decide what you need”. It is when all household income is pooled and it goes from being mine or yours to become simply ours. In the past few weeks, I’ve heard and read stories about spouses who were left high and dry after many years of marriage. The remaining spouse, whether a widow/widower or the survivor of a divorce, finds themselves without a livable income, without any real understanding of their current financial situation, and without any retirement or savings to fall back on. Suddenly, the comfortable position they’d been in for years and years turns into a nightmare of stress, depression and financial deprivation—one that could have easily been prevented.

On the website of the Women’s Institute for Financial Education (wife.org), they offer a free bumper sticker when you sign up for their free email newsletter. The sticker says “A Man Is Not A Financial Plan” and I agree. If you are counting on finding someone else to manage your finances, be it a life partner or a professional financial planner, you’re headed down a very slippery slope. What happens to you if something happens to that person? You cannot willfully give up your responsibility to take care of yourself and expect that things will always be wonderful in your life. You may cruise through 20 or 30 years of fabulous, only to find that your deceased partner never saved a dime and let the life insurance lapse. The monthly bills still come but there’s no money to pay them. And if you don’t have a work history to fall back on, that part-time minimum wage greeter job at the local discount store may be all you can get. Not only will it not cover the bills, it may be exceedingly humiliating and depressing, depending on your position in your own community.

It’s worse if the partner leaves you and has spent years making sure that they’re set for life and you get nothing. If you’re not involved in the day-to-day, the month-to-month, and the year-to-year financial planning of your partnership, you have absolutely no way to control anything or to ensure that your future is secure. A stay-at-home mom/dad/wife/husband who does not have a 401(k) through an employer should most definitely have an IRA funded from the household income. SAH parents/partners need to make sure that there will be money when they reach their retirement age just as surely as the ones out there in the day-t0-day workforce.

To those of you who are currently in a situation where you are completely dependent on your partner for your financial future, where you are being given an allowance and kept in the dark about how much money is where, you may be headed for a bleak future. You need to start getting educated, start asking questions. Tell your spouse that you’ve been reading about the U.S. economy and realized that you don’t even know about your own household economy. Visit personal finance websites and pull down some basic numbers for what you should have for the future and ask your partner to show you what you have. If they’re resistant, if they become agitated that you’re even asking, this could be a major warning sign. Go out and start a savings account on your own without telling them. Start doing everything you can to make sure that you will not be left with little to nothing to live on if they leave or die. Make handcrafts and sell them online. Sell your used books and DVDs. Babysit. Tutor. Clean houses. Do whatever it takes to bring in some extra money that you can save. If questioned about it, you’ll have to decide whether to be honest about it or not. You can say you gave it away, or that you spent it on things for the school. You can say that you wanted to learn more about money so you decided to start earning and saving it for yourself. However, don’t make the mistake of putting your partner’s name on that account, even if they get really angry over it. This is money that you need to be sure only you can access. And this is only if you’re in a relationship with a partner who is determined to not allow you equal footing.

Ultimately, each of us is responsible for ourselves. If I were to go sailing around the world with someone, I’d ask for lessons so I could help along the way, making sure that I could equally contribute to the necessary work for the trip. If they were to fall ill and be unable to maintain our course, I would then know enough to be able to step in and make sure we didn’t crash on the rocks before reaching our destination. Do you know how to steer clear of the dangers in the waters of your financial future?

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