For my new Ask the Analyst series, I\u2019m answering your questions about investing, personal finance, and retirement planning. Today\u2019s question is about how to engage a financially disinterested spouse.<\/p>\n
Question: My spouse has little interest in our financial position. As we age, this concerns me. I try to share some basic information (income, spending, account balances, debt, and so on) each month but rarely get a response. I think graphs or charts might be of more interest to her than a bunch of numbers. What recommendations would you have for illustrating our financial position so that I am not the only person aware of how we are situated? Thanks!<\/p>\n
Your situation is pretty common. Most couples I know develop a division of labor over time, where one person is in charge of financial matters and the other person is less involved. That\u2019s definitely the case for my husband and me. He\u2019s in charge of paying all the monthly bills and preparing our tax returns, but the financial planning and investment decisions are up to me. This type of arrangement might work well for a long time, but can become less sustainable with age, particularly if the \u201cfinance person\u201d in the relationship dies or develops a major health issue.<\/p>\n
Online Tools and Mind Maps<\/p>\n
Illustrating your financial situation with charts and graphs is a great idea that might help your spouse become a little more involved. Morningstar\u2019s Portfolio X-Ray<\/a> tool includes a variety of images that help illustrate your financial situation. Websites for most major brokerage firms also include some visual tools. Schwab, for example, offers a Portfolio Checkup and a bar graph illustrating your account\u2019s monthly income from dividends and interest income. Vanguard has a Portfolio Watch tool and a variety of performance illustrations, tools, and calculators.<\/p>\n A mind map<\/a>, which we used with clients when I worked for a financial advisory firm, can be another way to picture your entire financial situation on one page. There are various software<\/a> templates<\/a> for drawing a mind map, or you can simply sketch it out with a large sheet of paper and a pencil. Start with your names at the center of the page. Then draw spokes connecting to various categories, such as 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 can be helpful to go through the mind map together and make any updates needed at least once a year.<\/p>\n Other Ways to Communicate About Money<\/p>\n A few other ideas\u2014though not related to charts and graphs\u2014might also be useful.<\/p>\n I like the idea of putting together a net worth statement<\/a> that itemizes cash, taxable accounts, real estate, retirement accounts, and debt for each member of the couple as well as items owned jointly. It\u2019s a good idea to update this document at least once a year and discuss it as a couple<\/a>. If you set up the document as a spreadsheet, you can include columns with additional information such as account numbers, what each account is used for, which accounts are subject to required minimum distributions, or tax issues like potential capital gains.<\/p>\n Many couples also put together a binder<\/a> (sometimes humorously called a \u201cDoomsday Book\u201d) that contains information about where to find important paperwork, insurance policies, how bills are paid, what each account is for, steps the surviving spouse will need to take, final wishes, and any other critical information.<\/p>\n A Well-Qualified Financial Advisor Can Bridge the Information Gap<\/p>\n