Last Updated on September 10, 2021 at 10:02 am
A reader who prefers anonymity asks, “Dear Pattu Sir, my wife is not interested in personal finance. She is not interested in know where our investments are or how they are tagged to our goals.”
“She has never done an online transaction before had no clue of how to pay bills online and how many bills we have. While I appreciate her faith in me for obvious reasons, I am worried. How do I get her interested in at least the basics of money management?”
Note: We wish to acknowledge that many men are clueless about personal finance and leave it all to their wives. So the following discussion will be gender-neutral.
Well, join the club, my friend! I am also in the same boat as you are, and I am also as worried. While I will share some of the steps I have taken, they are not yet complete. I am hoping this article will push me to complete them.
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Our presence is not indispensable to our family or anyone else in the world. They will find a way in our absence. We can only take the horse to the water and cannot make it drink. So all we can do is to urge them to take an interest. If they don’t, our energies are better spent in doing the following.
List of essentials our partner should be able to access in our absence
- They should know (or better still, decide) the location of bank passbooks; Health and Life Insurance policies; Health insurance cards; Other relevant paperwork;
- Enough cash at all times to last a month or two in a couple of banks accounts. They should have access to these via ATM. If they use it for shopping, the remembering the pin problem is solved!
- They should know the contact number of a friend, family member, or better still, a SEBI registered fee-only financial planner to contact when required. If this is not done, some well-intentioned ‘know it all’ Uncle will step in and undo all the good work you have done.
- Wherever you invest or save, make your life partner the second holder and not the nominee. This will make the transmission of holdings so much easier.
- Set up an automatic forward of the monthly CAMS/NSDL statement of all your MF and stock, bond holdings to their email address. Explain what it is and make them auto-archive these emails (and not delete them in disgust). With this, a SEBI registered fee-only financial advisor can quickly and effectively guide your spouse.
- Share a text document or spreadsheet with them with full details of your investment plans: goals, target corpus, monthly investments made, asset allocations, investments, insurance details. Pretty much everything you think they should know or need. I have seen people share or request a template for this. There is no need for that. Just list all essential information in any manner that you like. Some partners would refuse to read this (ahem!). That is fine. It is enough if they know where it is. Create a hard copy of this document also.
- Attach a list of don’ts to the above document:
- Never listen to a bank RM
- Never listen to any sales guy without consulting a fee-only advisor or trusted friend who know enough about finance and shares your investment philosophy etc.
- Make a will if necessary and ensure they are aware of details. You can entrust a copy of the will to the fee-only advisor.
- I mentioned “if necessary” because your networth can be apportioned beforehand with some planning. For example, if you have liquid assets worth Rs. one crore, you can divide them into three parts and invest them in three different places. Your wife, son and daughter, can be the second holder in each of the three accounts. This help in the quick transmission of funds. Of course, there would be cases where a will is necessary. A fee-only advisor is typically trained in estate management and should be able to guide you. I prefer an “open will” where all relevant members know the contents when written.
- Online passwords: We have the following arrangement. I am sure there are better ways available. I have LastPass installed on both our laptops. All our banks, MF, Demat, utility bill passwords are stored here*. This requires a master password to open. I asked my wife to set the password. Each time I log in, I ask her to state the password to ensure she remembers. Some utility bill passwords are also stored in Chrome. So she should be able to login in my absence.
- In the above-mentioned document, list the password recovery method for some important websites. For example, which email or phone number was used for the login etc.
- The only thing this leaves out (for my situation) is basic training in online payment usage. My wife is educated enough to understand instructions on the page and handle this on her own. She knows the basics like not to use the same device for the opt and log in; prefer a feature phone over a smartphone for the otps; to be careful with pins and passwords etc.
* I can hear the tech guys sharpening their knives because they feel there are better options than LastPass. I don’t doubt it. Thank you.
This way, in our absence, they have access to cash for immediate requirements; they can log in to relevant websites as and when required or recover passwords. They have a document that mentions everything we planned, and they have contacts of a trusted friend or investment advisor. The rest is up to them.
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