In most situations, only one person is responsible for managing the household finances, but it can lead to a very difficult financial situation if that person passes away or becomes incapable of managing the budget anymore.
Teaching your partner about household finances is important not just to prepare for any future accident but also to share the burden and responsibilities. Heres how you can teach them about household finances.
Make a List of Everything
These things almost always start with making a list, and that explains the importance of lists. Dont assume that your significant other is aware of where you keep all the sensitive information. You may think that your filing system is well-organized or that your financial records are in an obvious and accessible location, but your partner may not be aware of them. If you manage some of your finances online, the chances are that some of the financial information is just in your memory and not in printed form. A list of all the accounts will make it easy for your beloved partner to see everything involved that needs to be addressed.
Give Them Access to Everything
Your partner should be able and ready to take charge, and thats why just the knowledge of the existence of these accounts is not enough. Youll need to give them full access. Provide them with a set of keys to the safety deposit boxes and share the code to your safe with your partner. Name them as the primary beneficiary or an account holder of all your accounts, life insurance policies, and every property you own. Make sure they know how to access online accounts and are able to understand at least the most basic of financial terms. Explain to them the importance of everything and motivate them to ask questions on what they dont understand.
Maintain a Household Budget Together
Managing a household budget together can be a great way to develop mutual understanding on financial matters and to bring your partner up to speed on various aspects of the modern financial world. Using the budget, you can teach your partner about managing income, paying debts, taking care of recurring expenses, handling investments and insurance policies and so on. It also means they can handle or take over the finances in your absence.
Give Them Financial Responsibility
Start by giving them small, manageable tasks with low stakes and gradually, increase their financial responsibility. You can start by making your partner pay a small bill and gradually increase the task based on the responsibility involved. Later on, have your partner take care of all the finances for a month as you supervise.
Encourage Their Growth and Education
Your partner may not be able to pick all of it quickly and there will be some mistakes involved, but try to encourage their education. Remember that they are going through a learning curve that will end up being beneficial for both of you in the long term.