Involve your Spouse in Financial Planning

By
Hemant Beniwal
39

Pravin, one of my close friends got his financial plan prepared without the involvement of Jaya, his wife who is a Law graduate by qualification and had opted out of career to take care of their son and other responsibilities as a homemaker. He was of the opinion that since they always discuss on what was really wanted in life, he indirectly is communicating it all.  We met up at his office a couple of times and once at his home too, however she was not part of the planning process at all. The plan was made and implemented. A year passed and all was well, until we met for the review.

This time I could convince Pravin and we roped in Jaya. Though he was still of the same opinion. To begin with, the plan was explained to her in detail with respect to the aspects that it catered, like all the contingencies, the education & marriage of their son; Rahul, a vacation home, medical corpus for his parents & in laws, retirement etc. At the end of it she nodded her head in agreement.

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During the process I happened to ask about her aspirations and how she felt regarding the way the family goals were structured and catered to and she couldn’t control her tears. Over the last several years she was totally engaged in catering to what the husband or son wanted and what was important for them. It was all limited to their schedules, their commitments and it all ended there. In a way she had lost her identity though it was her choice that she wanted it to revolve around her near and dear ones. However it was for the first time in these many years that she was asked her view and opinion.

And the plan changed upside down. Though the goals were almost the same, she had her own ideas about them – like:

  1. The way she would like their son’s marriage to be conducted, what she would like to give her daughter in law, their customs and traditions.
  2. Further she as a child was brought up in the interiors, very close to nature, which she always longed for since marriage. But since Pravin was always more dedicated to his business and they hardly had any vacations & her longing remained unaddressed.
  3. She had her own ideas about retirement too. To be with their only son wherever he would settle, i.e. settle in the same city as he would, may or may not be in the same house, depending on the situation.
  4. Since the son had now grown up, she intended to work part time for a NGO, which cared for the abused/exploited women in society and in the process utilise her capabilities as a lawyer.
  5. Lastly she also threw some insights into the inclination and interests of their son and the direction in which his eduction shall progress.

She brought in a lot of clarity to the process, which led to a healthy discussion on the various goals in detail and then they arrived at a common platform for their future which was in alignment with their goals. This helped me to work in the right direction of course at the cost of:

  1. Almost a new plan was in the making, since it was better than amending.
  2. Reworking the investment strategy to meet the redefined goals.
  3. Fresh implementation.

We Indians are brought up in the way Pravin behaved, since for generations the head of the family took all the decisions, offcourse keeping in mind the well being of the family, which worked very well in the joint family system. The system effectively distributed all the responsibilities and the support was very much built in. However with the change in the way we live today, the nuclear family system has become the new norm and here the dynamics are totally different with the values & support of the joint family system fast vanishing.

To conclude, a good lesson taught by this experience “ALWAYS INVOLVE all the STAKEHOLDERS concerned” to get the right picture of their aspirations and deliver a plan which shall cater to the aligned goals. A lesson for you is “Always involve your Spouse in Financial Matters”.

This is a Guest Post by Chetan Bhatia – he is a certified Financial Planner & member of The Financial Planners’ Guild, India. FPGI is an association of Practicing Financial Planners to promote professional excellence and ensure high quality practice standards. 

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39 COMMENTS

  1. A very good guest post. I agree that it is very important to involve the wife also in the financial planning process. In many instances women are more involved in the upbringing of their kids and can provide many useful inputs.

    • Hi Anil,
      Things are changing very fast – almost in 10% our financial planning clients, wife is looking after the finance ministry 🙂

      • Hi Hemant
        Yes, I agree. Even my mother has been much more knowledgeable than my father in financial matters and mainly responsible for savings and investments.

  2. Very Good . Just in time for me . I am just taking the initial steps into the family financial planning and I realized the importance of having my wife in the active discussion . It brought a whole new perspective and priorities .

    I think it’s good for the family if all stake holders are invOlved .

  3. Hi Hemant,

    Is it a good idea to involve wife in a financial strategy bcoz in india there are more than half of the women who do not understand about financial situations and are more involved in spending money rather than saving money. I am not saying all men understand about financial planning but since in percentages men are the ones who earn money and are ideally gonna value the money more than women who is a home maker. Hence I differ from your opinion for the first time. I think husband should only tell her woman what financial planning he has done for the future rather than involving her wife in financial planning depending on how educated the wife is. The criteria that I mentioned above is only for home maker wife not for the working wife.

    • Hi Manoj,
      Idea is not that you share the strategies of investments with your spouse or not. But won’t you like to ask about her dreams(goals) or is it compulsory that she follow what you have decided.

    • Hi Manoj
      I beg to differ with you here. Even though my wife is not working, she takes a lot of interest in financial matters and provides very good inputs.

      • Hi Anil,

        Keep everything aside and give me just one simple answer. If you had to select one mutual fund for investment, would you take an advice from Hemant who is experienced person in this field or you will take inputs from your wife(unless your wife is also Certified Financial planner). Please give me an honest answer rather than being diplomatic about women like few others here. And one more thing if all women had given us good advice then none of us would have been discussing here about financial strategies here on TFL.And I am afraid thats the honest truth.

  4. Hi Hemant,

    Ofcourse I will ask her about her dream and only then I will do my financial planning but wont involve her in the decisions of which mutual fund I will invest in or how I will invest in PPF in order to achieve the goals unless n until the wife herself is an earning member or educated in that kind of field. In India we find a lot of women who donot know the savings mantra. Whenever the husband gets some bonus or looks to save from his salary or gets an increment..the wives takes them to shopping for some expensive sarees or some jewellery. Hence there are lot of men who infact donot tell their wives about their savings due to these aspects. Its all about mutual understanding to achieve goals and sacrifice some unessential things in life inorder to achieve more important things in life. I am certainly not one of those since I m not married yet but I have seen lot of my friends suffer through this situation though 🙂

    • Hi Manoj,
      I just want to add my comment on this “Whenever the husband gets some bonus or looks to save from his salary or gets an increment..the wives takes them to shopping for some expensive sarees or some jewellery. ”
      Don’t you think one of the biggest reason is female members are not involved in money decisions – they have no clue how much they need to save on monthly/yearly basis for achieving their goals.

      • Sometimes I wonder how do God make the pairs? One likes hot foot, other cold icecreams. One likes having fan full on the other fan at min. One is a spender other is a saver?
        If men don’t tell the wife about the bonus , wife also doesn’t tell the husband how much she saved from the amount he gave. I have seen husband taking loan and not telling their wife till time comes when they are unable to pay the loan and then approach wife to sell her jewellery.
        It boils down to trust and space in relationship. I think having a balanced approach works. And one needs to remember both are not on the opposite sides but need to work on the same side.

    • Hi Manoj
      Much as I tried not to reply to your remark, I find that I am just not able to hold back!
      You do realise that your remark reeks of chauvinism? Are you implying that a stay-at-home-mom/wife who is not a finance major cannot take an informed decision on which mutual fund, PPF or other such instruments to invest in? Or how to much one should invest in these instruments?
      I am a soon-to-be stay-at-home mom who is not a finance major to boot! But thankfully, I am blessed with a much more open-minded husband than you have portrayed yourself to be. We jointly decided on the amount to be saved for our short-term, long-term needs and I make the decision on where and how much to invest.
      As Anil says, I sure do hope you will change your perspective after you are married, because the opinion you have now is truly sexist! If you continue with your current trend of thoughts, your wife is to be pitied indeed!
      And do note, that for every woman who spends on sarees and jewellery, there are an equal number of men who spend the same thousands on the latest gadgets! And while jewellery might possibly be sold for the same/better price later on, a gadget loses money from the moment it is bought.

      • Hi Pearlie,

        Thankfully I wont be of your husband’s type who is a wife’s puppet rather than a person to be called a real man who has the ability to take his own decisions. Now this is only just my answer for the words u used for me in this public forum.

        Coming back to the point, I gave my opinion here and my opinion here is based on the reality of my friends day to day life. Not many people in this world get wives that are as educated as you are. So they donot know the proper mantra of saving. In my previous point as well, I stated that “I will definitely ask my wife about her goals”.

        Now one important point I would like to share with Hemant and Anil here..

        Hemant has always said that one should start investing as early as possible in their career. So why should wait until I get married and then start investing. As of now I have already selected my mutual fund SIP’s and PPF and FD’s investments thanks to TFL. Now If I selected them and my funds are doing well then sure I will continue with it even after my marriage rather than asking my wife and get confused and invest some where else. Now coming back to the goals of my wife, I dont have to ask my wife which mutual fund I have to select since I have already selected and are doing well. Only thing I have to do is inorder to achieve the goals of my wife I either have to invest some more amount in the SIP’s for long term or if its short terms then invest them in FD’s.

        Thats my point, and I stick to what I said. Its all about personal experiences.

        • Congrats Manoj on starting investing early. Compounding is 8th wonder of world and time helps money to grow.
          A request keep your wife updated of your financial investments, involve her teach her. It would be good to have some one to discuss about financial matters.

          • Hi Kirti,

            Ofcourse as I mentioned in my previous comment I will tell her about my investments but not take an advice from her on where to invest unless and until my wife keeps on regularly visiting TFL like me 🙂

            • Thanks Manoj. Best of Luck for your marriage. You never know you might get a wife who understands finances more 🙂 Looking forward to seeing her on TFL sometime in future.

              Keep your mind open- Common sense, maturity, IQ, Emotional Quotient are not gender or age based. We have some great women at the helm of Indian banks – Chandra Kochar(ICICI Bank) , Shikha Sharma(Axis Bank) etc. And when you teach you wife, she in some way will in pass information to your children..

    • If you are first time investor you can open PPF account in post office. But the best way is if you are account holder of BOB, SBI or ICICI bank you can open PPF account with your bank. ICICI offers online PPF account. Go for it.

    • Sanjay –
      Not sure if you are aware of the website jagoinvestor by Manish. You may want to look at that site and especially the forum for more details on PPF. Many ppl contribute on the forum and is a treasure of information.

    • Best option is to open PPF account with SBI, you can view it online and make transfers online as well. This facility is not present in post office accounts.

      To claim tax exemption under section 80C, all you need to show is the statement with deposit entries for that particular financial year. The deposit limit is 1 lakh per financial year.

  6. Liked the tag line “ALWAYS INVOLVE all the STAKEHOLDERS concerned”
    Very apt post. The reasons I feel it makes sense are:
    Two heads are better than one
    There is someone to talk and discuss the situation. We usually do not discuss our financial situations with our friends.
    I have often seen women not showing interest in financial matters. They feel that they have divided the work – husband looks after finance , wife about kids, house.
    On the other side there are women who manage the family expenses.- Husband is busy earning.
    In either case I feel that even if spouse is not involved in day to day financial details a strategy needs to be worked out at a macro level keeping both their interests in mind.

    • Hi Kirti
      I agree with you.In our case my father and mother were both working but the family expenses were always managed by my mother. My mother was always actively involved in any investment decisions taken by my father. Yes, a strategy needs to be worked out so that neither feels left out.

    • Hi Kirti,
      I am not sure you have read it or not “HSBC loots Suchitra Krishnamoorthi after big promises of 24% returns” She lost half of her divorce settlement amount.
      I think people need to understand what will happen in case of sudden demise of husband – they have to involve spouse in financial decisions.
      I must admit women are more mature – we males are just chauvinist. Even a recent survey on 60000 people suggested “Women are more moral than men, with those over 30 years old having the strongest values”.

      • Hemant came to know about Suchitra’s Krishnamoorthi’s loss by HSBC through twitter. It’s good she spoke for if she can be taken for ride what about the common man.

        I agree with women should be aware of the financials of the house God forbid is something happens. Somehow we tend to live in the world where we think Such things can’t happen to us. So Term plan, health insurance are not that popular.

        I disagree with you but appreciate you for saying on the public forum I must admit women are more mature – we males are just chauvinist. Maturity has no sexual preference. Some women are mature as are some man. Anyway statistics or numbers are good for reporting but in the end it boils down to I, me, myself. My parents told me when I got married Marriage is like a vehicle. All wheels are necessary and need to be aligned and in synchronization. Only then will you be able to go ahead in life. My Husband is not perfect nor am I. We have tried to come up with some basic framework which includes his preference in different matters-food, spending, investing and some of mine too. That’s another story that our children are the masters of the house 🙂

  7. A very good post. I agree about involving the wife in the financial planning process. In many cases wife is the one who spent most of the time with the children and thus know their dreams(Education related) and also the customs which needs to be followed during marriage & other occasion. So she must be involved.

  8. Hello sir ur articles r very clear n very easy to understand it surely help all of us.after joining the course of cfp and after reading ur articles I realize the importance of term plan and I have taken the term plan for my brother as he is the only earning member.he was also stuck in the trap of these pathetic endowment policy but when I show him some calculations regarding these policies he was shocked.thnk u very much sir.he even dont do the tax planning and whenver I speak abt these plannings I heard only these replies”bro u r doing the course so u should do all these things”.i agree tht it is my duty but after seeing the huge comments in ur blog I dont think every person should learn the importance of financial planning.

  9. Sorry I think every person should learn the importance of financial planning my mistake in last sentence.

  10. Hi,
    THANKS FOR MAKING ALL THE ASPECTS VERY CLEAR AS I AM READING YOU ARTICLES THANKS AND PLS KEEP UPDATING US ….

  11. Yup financial bloggers too have a life and spouses 🙂

    Loved the quote…adding one to it
    Getting married is like permanently grafting your hand to the cookie jar. No matter how sweet those cookies may taste, you can’t help but wonder what would have happened if you’d chosen some other dessert–brownies, for instance … or frozen yogurt … or maybe chocolate strudel.

  12. Hi Hemant,

    In deed a very good article. I think another reason for involving wife while planning is we, the husbands, think with their brain while wives think from their heart and come out with better ideas or suggestions.

  13. IF MORE THAN 1 IAC IS DEPOSITED IN PPF ACCOUNT . IS IT WILL PULL INTEREST ?

    IS FMP IS BENEFICIAL TO SAVE TAX AND SAY REGARDING RETURNS FROM IT

    • Dear Mr.Gupta

      You cannot deposit more than Rs 1 lakh in PPF account.

      FMP is good wrt post tax returns in comaprison to fixed deposits.

  14. Dear Sir,
    I want to invest some money in health insurance. But I have a little problem in this regard. Today there are many companies in this field for providing health insurance policy. So it is very tough for me to choose which is better. Please suggest me which is better. Please send a list of top health insurance provider companies in india.

    Regards,
    Kailash Dhyani

  15. Dear Sir,
    Namastey! I want to know about family floater plan of Max Bupa Health Insurance. Is it better than Optima Restore of Apollo Munich. Plz help and give the best advise.

    Thanx.

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