If your wife is a homemaker, well this article is for you.
In a recent popular TV ad, a husband is teaching his wife how to drive, so that in case he isn’t around, she does not have to rely on someone else.
This is the exact sentiment with which we start off this article; that though your wife isn’t contributing financially to the household, this is her money too. She has equal rights in the family and she is an equal partner in raising your children. We know your biggest worry is what happens to her and our family if I am not around. Well, there are a few things that you can take care of which will let you be worry-free.
- Adequate insurance: First thing to take care of is protect yourself and your family through an insurance cover which you probably must have taken already. However, do check if this is adequate. We usually have a false sense of security when it comes to insurance because we think it is enough, whist it isn’t. If you haven’t reviewed your insurance requirement in the past 4 years, it’s time to do it now. It should be a calculation of your expense protection (Annual expenses/ risk free rate) + liabilities+ future children’s goals- existing assets- existing insurance cover for a start. Of course, this is the bare minimum and just a thumb rule, there are calculations which involve inflation and life expectancy which will give you a more suitable number. However, since we’d like to keep it simple, this is a good start.
- Involvement of your wife: Start involving your wife in as many investing decisions as you can. If she is only a signing authority, do explain to her what and why she is signing. If she has no exposure here at all, start with showing what your existing investments and insurances are; what your thought process behind these are. She may not be interested in technical discussions, but that doesn’t mean she will not be interested in these discussions. This is her future too, and trust me- she will definitely be interested. If she isn’t, it’s just that she isn’t interested “yet” but she will eventually be interested. Don’t give up.
- Somewhat difficult questions: These are questions which are difficult to discuss, if you’d like to discuss with an advisor that may not be a bad idea too. These could be questions like: How much of what we have invested in is at risk, how much can we liquidate at any point, how much insurance do we have etc. You could help her by addressing these questions and ask her what her concerns are as well so that you could discuss these as a family. When your wife is involved in investing decisions she is thinking of the family and you must respect that.
- Raising financially savvy children: When you have money conversations as a couple, it is also easy to have money conversations with the family. You will indirectly raise financially savvy children who understand investments and hence may be able to be better investors themselves.
- Understanding risks and sharing them: She may not understand risks and so might be averse to it. It affects you directly because if you want growth you have to invest in equities (albeit for the long term). If she understands this, you will be in a more comfortable space while investing because you are not scared that in case of a fall (in the interim) she will “blame” you for losing money or for “gambling away” your retirement fund. She will be patient in times of a downturn and correction and this will help you ride through the storm together and with a greater peace of mind.
- Bring balance and adopt a holistic view: If you are aggressive by nature, you may be aggressive with your investments too. Your wife might help bring balance to this. Women tend to be more conservative than men. However, if you are conservative too, you need to keep your eye on goal and your advisor needs to understand this and evaluate the impact this will have on your goals.
- Documents: Keep all your documents – investments, assets, liabilities and whatever else that you think is important at one place and ensure that your spouse knows about these. You could keep a copy at home and the actual documents in a locker. You should also record investment related IDs and passwords in these documents and have a way of updating these regularly.
We know you believe that she is an equal half in your family. Ensure she is your equal half in investing too.