When running a household it has been said from time immemorial that husband and wife are the two wheels of a cart and such that financial well-being is maintained they are some of the matters both should know. In a case which rarely is a scenario now with the millennial population, where male is a working person, while female is a home-maker, he is all the more responsible to make his aware on all financial matters:
Why financial awareness for both spouses is a must?
This is all the more necessary as the information or sole financial management by one person may leave the other in a troublesome situation in case of ill-fate situation such as his or her untimely demise. Prior knowledge on the matter will pan out well for the well being of the family's financial health.
Also because fair knowledge on the matter will enable both to actively participate in the finances management of the family and will lead to healthy decision most of the times.
Here we discuss all such matters that need to be known by both the main members of the house:
1.Financial assets or the total wealth can be discussed at first:
The starting point in the discussion or when acquainting one's wife or husband on the matter, the communication can revolve around the various current assets ranging from gold, FDs, insurance, bank locker, EPF, PPF etc.
2. Make it a point to ensure joint discussion when consulting for money matters:
When going for a tax related consultancy to your Chartered Accountant or discussing your investment decision with a financial planner, encourage the involvement of both of you in all such discussions.
This will ensure that your wife gets a hang of the techniques you opt for when constructing your investment portfolio.
3.Budget preparation can be a joint exercise:
Both short and long term money goals can be reached more realistically if both the spouses participate. And this can be done on the basis of wants, needs and desires. Also, here in for reaching the goals, desired liquidity, return aspect needs to be considered.
4. Taxation KT is also a must:
While the subject of taxation is not everyone's cup of tea, one must ensure that some basics are still be known by your spouse. Here as and when you will begin to involve her, she will hone her acumen over time and know all such tax saving ways.
5.Liabilities also cannot be hidden:
Both official as well as unofficial information on your liabilities should also be known to her as then she would be able to do more justice in running a household and at the same time help you in servicing the various debts with which you may be burdened.
6.Reasonable valuation of the various investment should also be made known:
At times, for some of the investments it is difficult to arrive at the actual valuation and hence a closer value can be provided as in case of some disputed property or the like. This is also true for the bullion, jewellery as well as antiques if any.
7.Insurance plan knowledge cannot be neglected at any cost:
It is for the safety and financial well being that we buy term insurance plans and not telling about the various matters, such as to where the policy document is kept or who is the insurance agent who will come as help in times of making the claim can prove to be a tedious task for your spouse, if she happens to run for making claims.
This document while it tells on how the wealth has to be distributed among heirs in the family. It also gives a prudent idea of one's wealth and investment and how it should be well-managed. So, speaking to your wife about your ‘will' shall also go a long way in sound financial management of the family's finances.