Don’t wait for death or divorce…Knowing how to handle your finances is a necessity

Don’t leave your spouse or partner to manage your family finances. Whatever your role, stay home parent or CFO of a top 200 company you need to have some control over your family finances.

Despite the fact that women hold more than half of the country’s private wealth and make the majority of a household’s purchasing decisions, they tend to push financial decisions to the side, often relying on a spouse or a parent to handle them.

My drive to encourage women to have some control comes from client and personal experiences. When I first met one client she was under a great deal of stress because she had just found out that her husband was having an affair and was about to go through a separation. Her only request was “are you able to help me work out what we have?” She had no idea of their financial position – not an uncommon scenario. She was married to a wealthy executive and had been the parent at home raising her 3 daughters for the past 16 years. From the time her children were born, she let go of any control over the family finances leaving it to her husband to take care of. The extent of her involvement was to sign the documents her husband placed in front of her from time to time. She was content just having access to cash when she needed and credit cards that were paid off by her husband. When he offered a lump sum of cash as a settlement that didn’t really tally even close to the value of some of the assets, she knew that she needed help.

The good news was that she recognised that she needed help. We were able to piece together the family’s financial position that resulted in her settlement being 3 times that offered to her initially by her husband.

A more recent experience involved the death of one my elderly male clients. I had always dealt with him and despite many requests for the wife to join us for meetings it was always “that’s his area, I don’t need to know”.  When the client unexpectedly passed away, the first call with the wife involved a very distressed discussion around “what do I do? Can I keep taking cash out? How do I pay the bills”. Even worse in this example was that the client had not documented many things and had most of their personal information in his head, including the location of his will. While we were able to work with the client to sort out the various concerns, it took unnecessary stress and time.

I also grew up in a household where my mother was the stay home parent while my father handled all the finances. My mother didn’t have access to any of their accounts or credit cards. She relied on a weekly allowance from my father to cover the household costs. When they divorced after 15 years of marriage, my mother walked away with 3 children and no assets. My father had no assets in his name at the time, as he had managed to transfer them to his siblings to manage.

Don’t think it won’t be you. Research shows that 9 out of 10 women will be solely responsible for finances at some point in their lives.

Some simple tips you can follow:

  • Get involved in managing the family’s finances. Understand what is going on with the investments and debt. Review all bank and investment statements monthly. Know where your money is. Keep organised records.
  • Have your own bank account and credit cards. If not at least make sure all the cash and savings accounts are in joint names.
  • Make sure your home is in joint names. This is a must to ensure that the home transfers to you automatically on death.
  • Make sure you have a copy of both wills. It’s important to understand how the assets will flow on death.

Fortunately events like this break down the barriers and encourage women to take the helm. A key part of getting on top of one’s finances, is considering how to handle both immediate, and future, finance.

About Siobhan Sellick

Siobhan has more than 20 years experience providing business advisory, taxation and private client services to a range of clients with a focus predominantly on High Net Individuals and Senior Executives.

She is currently a Director in the Business Services and Taxation division in Prosperity’s Sydney office, managing a team of professionals.

Prior to joining Prosperity, Siobhan was a Partner at a mid tier accounting firm and had also previously spent 15 years at Ernst & Young in their private client practice providing tax advisory, tax compliance and accounting services to privately owned businesses and high net wealth individuals including CEO’s, business owners, passive investors and professionals. Her clients ranged from high profile entertainers and sportspersons to CEO’s of large multi-national corporations, primary producers and privately owned businesses in the retail, aged care and professional services sectors.

While at Ernst & Young, Siobhan also spent time in their Middle Market corporate practice providing accounting and tax services to foreign companies establishing operations in Australia and other start-up companies.

Siobhan is focused on developing strong relationships with her clients and working together with key parties such as lawyers, bankers and financial advisors to provide a high quality service to all clients.

A strong supporter of women in business and active in women’s networks.

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