FOLLOW THE MONEY

Many women choose to let their husbands take care of the family’s financial responsibilities, but that is not a wise choice.

WRITER: J.E. CARPENTER

Even in a world that has changed so much since grandma’s day, girls and women get subtle and not-so-subtle messages that investing is male territory. This starts in elementary school, where many girls receive the message that math is for boys. From a doll that says, “Math is hard,” to brother getting punished for a failing math grade while sis doesn’t, teachers, parents, and society fail girls when there’s no expectation to develop basic skills in math and finance.

A newlywed woman may heave a sigh of relief and throw all the investing decisions in her husband’s lap. Most likely, he’s only too happy to take them off her hands. This is a terrible mistake on her part. While the world has opened more opportunities for women, it also offers less security. With high divorce rates, the woman who leaves “all that” to her husband is, to put it bluntly, a fool. These principles apply to both women in traditional marriages and women in same-sex relationships who foolishly let their partners make all the money decisions.

Here are details every married woman needs to understand about finances:

1) What happens if my husband dies?

Know how much life insurance your spouse has, if the premiums are paid regularly, and where the policies are. This is not morbid or greedy. It’s common sense, especially if you have small children and don’t work outside the home. Knowing this is your protection against absolute disaster.

2) How much income do we have?

You should know how much your husband makes and how much comes in from interest on bank accounts, dividends on stocks, and so forth. If your family files a joint tax return, your signature is required for filing. Even if your husband or your accountant prepares the return, take a look at every line and ask questions.

3) How much debt does my family have?

How big are your monthly payments for mortgages, loans, and revolving credit? Keep the “what ifs” in mind. If your husband died or filed for divorce, could you remain in your home? Would one of you be able to pay off the debts? No matter how sure you are your marriage is solid, you need to know these answers. You’ve probably had friends who were blindsided by divorce. Sticking your head in the sand because the idea frightens you is the worst thing you can do.

4) Do you have savings accounts and other investments?

Where are they? How did your family decide where to invest, and how have those investments performed?

5) How can I learn more?

Read articles or books about managing money. There’s no need to drown in higher math or complicated charts. If the author can’t write in plain English, the advice is suspect anyway. Don’t fall for people who want to convince you it’s all so complicated you need to hire their firm to do it for you.

Many basic principles of personal finance and investing have more to do with calculated risk and common sense than they do with complicated formulas. Suze Orman can help you understand the basic principles of personal finance. If you’d like to learn more about the stock market but don’t have an accounting degree, it’s hard to beat Peter Lynch’s “One Up on Wall Street.” While the details are dated, the basic principles are as sound as ever, and it’s one of those very rare investing books that’s fun to read.

Never let anyone else take responsibility for your financial security. Every woman should know where the money comes from and where it goes. Teach your daughters about finance and raise a new generation of women who won’t be victimized by death or divorce.