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What You Should Know About Your Family’s Finances

Work + Money

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Marion O. Sandler, President, Sandler Foundation

By Marion O. Sandler

My friend Lucille’s husband died suddenly.  She experienced unremitting grief.  She also experienced tremendous anxiety.  Why anxiety?  Because she had no idea what her financial situation was.  Was there life insurance?  What assets did she have to live on?  Would she have to go back to work? How could she find the answers?

But why didn’t Lucille know the answers?  It was her right and her obligation to be familiar with the family’s finances.  But like so many women, she didn’t ask or she didn’t insist on knowing.  She didn’t expect her husband to die.

All women are entitled to know their families’ financial condition.  I often think of Isabelle who lived in New York and took subways everywhere she went.  It wasn’t that she enjoyed subways, but they were cheaper than taxis.  It wasn’t until her husband died that she took taxis and even limousines, because that’s when she discovered they were centi-millionaires.

Women sign tax returns, because they’re asked to, but may not take the time to understand their contents.  They probably don’t know about community property and, worst of all, what that property consists of.  One day they may be widowed like Lucille and Isabelle or divorced like my friend Annette.  I held their hands through these devastating periods when they had no idea how to get through the labyrinth of their family finances.  But what would have happened if they didn’t have a close friend to take over?

One of these days, I may write a book called Family Finances for Dummies.  My table of contents would look something like this:

1.   ASSETS

  • Bank Accounts
  • Checking Accounts
  • Family Business
  • Partnerships
  • Real Estate
  • Stocks
  • Bonds
  • Other Investments 

2.   LIABILITIES

  • Bank Loans
  • Credit Card Debt
  • Mortgages
  • Securities on margin
  • Other Debt

3.   OTHER OBLIGATIONS: CURRENT AND PROSPECTIVE

  • Income Taxes
  • Life Insurance Premiums
  • Automobile Payments
  • Tuition

4.   HOUSEHOLD EXPENSES

  • Property Taxes
  • Homeowners Insurance
  • Health Insurance
  • Maintenance
  • Utilities/Telephone

                 -- Gardener, pool service, etc.

                 -- Repairs

  • Cable for TV, computer, etc. 

5.   SOURCES OF INCOME

  • Life Insurance
  • Salary
  • Dividends
  • Interest
  • Royalties
  • Other

6.   PROFESSIONAL ADVISORS

  • Attorney
  • Banker
  • Broker
  • Accountant
  • Financial Advisor
  • Insurance Agent 

7.   LOCATION OF DOCUMENTS

  • Wills
  • Tax Returns
  • Trust Agreements
  • Contracts
  • Insurance Policies
  • Cancelled Checks
  • Paid Invoices

8.   OTHER INFORMATION

  • Location of safe deposit box
  • Key to safe deposit box
  • Passwords and pin numbers for all accounts on the computer
  • Credit score

Lucille, Isabelle, Annette and I had to find answers the hard and painful way.  We had to locate all documents and read and understand them, take care of the will, pay estate taxes, figure out a budget, and in one case, find a job.  If I were not there to help and reassure them, they would have been in crisis mode for months, if not years.

My message loud and clear is that every woman must plan ahead and not be financially ignorant.  She owes it to her children.  And most important, she owes it to herself.
 
Marion O. Sandler is currently President of the Sandler Foundation and formerly Chairman of the Board and CEO of Golden West Financial Corporation, an institution with $125 billion in assets listed on the New York Stock Exchange.

How can women get this financial information? Read 5 Ways to Talk Money with Your Partner

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Comments

  • Should we settle? I did what I thought was settling. Found a man I fell in love with, that adores me. He is sexy and intelligent but he is not a bread winner and owes more child support than he will probably ever be able to pay in this life time. I fell in love. Seven years in and now the economy has fallen apart. I am a general contractor and struggling to make ends meet. The stress on our relationship has been incredible. He has always worked but not really contributed much. This wasn't a huge problem when I could handle everything. I feel like I am the one with the changing needs. He hasn't changed. I feel as if I am being unreasonable expecting him to contribute now, when he couldn't do so before. I drove him away 6 months ago. He is surviving and still insists we were meant for each other. I have tried dating others but tend to agree with him. Now I am struggling with the "settling" issue. Do I settle for a man that cannot support me and his children? Or do I move on? I am 41 with two kids 6 & 12. Its hard to be a single mom in any economy... it seems impossible right now.

    Posted by mandala, 8 March 2010.

  • My daughter's husband hides his finances, does his taxes separately and refuses to discuss it with her? How should I advise her??

    Posted by Lydia Mathis, 17 February 2010.