How can I illustrate our financial position to a spouse who shows little interest?
Reader question: My wife has little interest in our finances. This worries me as I get older. Each month I try to share some basic information (income, expenses, account balances, debt, etc.) but rarely hear back. I think graphs or charts might be more interesting to him than a bunch of numbers. What advice would you have to explain our financial situation so that I’m not the only one aware of our situation? Thanks!
Answer: Your situation is quite common. Most couples I know develop, over time, a division of labor in which one person is in charge of finances and the other person is less involved. This is definitely true for my husband and me too. He’s responsible for paying monthly bills and preparing our tax returns, but financial planning and investment decisions are up to me. This type of arrangement may work for a long time, but may become less sustainable as you age, especially if the “financier” in the relationship dies or develops a major health problem.
Online tools and mind maps
Show your finances A great idea that can help your partner become a little more engaged is charts and graphs. Morningstar’s Portfolio X-Ray The tool includes a variety of images to help illustrate your financial situation. Most major brokerage firms’ websites also include some visual aids. Schwab, for example, offers a Portfolio Checkup and a bar chart that shows your account’s monthly income from dividends and interest income. Vanguard has a Portfolio Tracking tool and a variety of performance plots, tools, and calculators.
A. mind mapAnother way to picture your entire financial situation on one page might be something we use with our clients when we work at a financial advisory firm. There are various softwaretemplates While you can use it to draw a mind map, you can also draw a simple outline with a large piece of paper and a pencil. Start with your names in the middle of the page. Then draw bars that connect to various categories, such as the names of other family members; investment accounts; real estate and other assets, insurance policies, estate plans, key goals and values, and contact information for accountants, estate planners, and other professionals. It may be helpful to review the mind map together at least once a year and make any necessary updates.
Other ways to communicate about money
A few other ideas, although not related to tables and graphs, may also be useful.
I love the idea of putting it together. net worth statement A list detailing cash, taxable accounts, real estate, retirement accounts and debts, as well as jointly owned items, for each member of the couple. It is a good idea to update this document at least once a year and discuss this as a couple. If you set up the document as a spreadsheet, you can add columns that contain additional information, such as account numbers, what each account is used for, which accounts are subject to required minimum distributions, or tax considerations such as potential capital gains.
