When it comes to money, knowledge is priceless. So we’re talking with our friend Ann Greenberg, a Chicago-based Financial Adviser, about how we can smarten up. Ann says it’s crucial to have a comprehensive understanding of your financial situation—as well as money and credit of your own—to protect yourself and your family if difficulties arise.
Ann has an MBA from NYU’s Stern School of Business, began her career as a Securities Analyst for a Wall Street hedge fund and ran her own financial consulting company. Now a Financial Advisor with Highpoint Planning Partners, she helps clients achieve their investment goals through a highly personalized planning process. A Certified Financial Planner, she’s also passionate about helping women navigate the difficult transition of divorce. She has seen first hand the problems that can occur when women are in the dark about their money.
Women can be reluctant to ask their partner about finances, as if it were a sign of mistrust. “I hear that objection time and time again,” Ann says. “A woman thinks her husband will be insulted or threatened if she asks him for this information.” Ann considers sharing the details a loving act, and advises women to frame it as, “This is a way for you to continue to take care of me.”
Regardless of your marital status or who pays the bills, here are ten things Ann says you should know. This is important stuff and, as Ann says, the time to do it is before disaster strikes. “Illness, death and divorce are traumatic and it’s hard to think clearly when you’re going through that. Get it together before you’re traumatized,” Ann says. So put on your detective hat and start investigating. We did!
10 Things to Know About Your Finances
- Your total annual household income, including salary, bonus and investment income. The best source for this is your tax return.
- Your expenses. What do you pay each month for mortgage, utility bills, car payments? What are less frequent expenses like insurance, tuition and property taxes? Check your checking account and credit card statements. You may be surprised at what your family spends.
- Your total assets. Review statements from bank, investment and retirement accounts—both the ones you manage directly and those through an employer. You may have assets you don’t even know about from past employers!
- Who owns what. Even if an asset is in just one of your names it is still marital property, but you should know how it’s titled.
- Your total debt. What do you owe in terms of credit card balances, car loans, mortgage, and other loans?
- Your personal FICO credit score and credit report. Women need a strong credit history of their own in case anything happens to their partner. If you don’t have a credit card in your own name, get one. Pull your own credit FICO score (the score that banks look at when loaning money) and make sure your credit report is accurate. I checked mine here.
- How to get cash. Have a bank account in your own name with money you can easily access. If anything happens to your partner you may not be able to access his funds for some time and you’ll need cash for bills and expenses.
- Contact information for your estate planner, financial advisor, attorney, accountant, and life insurance representative.
- Beneficiaries. Make sure the beneficiaries on your retirement accounts, IRAs and life insurance policies are current to avoid legal issues down the road. You don’t want your ex on your policies!
- Location of important documents. Find the physical copies of your wills, trusts and insurance policies. If you travel or go away for long periods of time, make copies and take them with you.
Ann has created what she calls a “Love Drawer” for her husband and adult kids. It’s a file that contains their account and contact information for all their assets along with important documents like their wills and trusts. “I keep it in a file where everybody knows about it, so if anything were to happen, they can easily find it,” Ann says. “Don’t put it in a safety deposit box because when that person dies everything shuts down until it goes through probate, which can take over a year.”
Laura and I immediately realized we hadn’t done this for our own children! If something horrible happened to us, we’d leave our kids completely unprepared. So, inspired by Ann’s Love Drawer, Laura and I decided to create a slimmed down version, more of a “Love Letter” for our families. We started by making sure we had all the boxes checked on the list above (I need to open a checking account!), then compiled a summary of important contacts and accounts (minus account numbers and passwords) that we shared with our kids via email. Here’s how we fared.
What We Learned
The biggest problem I faced with this challenge is that my husband and I are in Florida for the winter and all our important documents are back in Chicago. Oops. Why didn’t I think to bring them with me—or at least make copies? We’ll be fixing that issue the next time one of us heads north, but in the meantime, I was at least able to come up with all the necessary contact info for our wills, trusts, insurance policies and investments to give our kids. There are a few holes in my “love letter”—we own a minor stake in a hard cider start up company I can’t track down and I have an old insurance policy out there somewhere—but I found most of my account statements on my computer or online. I felt good about putting all this information in one document, but a little weird sending it off to Nick and Emma. It’s kinda morbid, right? But it’s the responsible thing to do, and overall, an empowering exercise.
I thought this challenge would be pretty easy, since I tackled improving my financial literacy as a Covid project, and I’ve always had my own credit card and checking account. However, once I got down to the nitty-gritty, it was a different story. First, it was emotional to think about my kids needing this information because something tragic had happened to my husband and me. But once I got done sniffling over our fantasy deaths, I discovered we weren’t as prepared as I thought. The advisors and accounts were easy to pull together, but once I got down to our estate planner and wills, I couldn’t find anything. Who was our estate attorney? That took a deep dive into an old email account, and then once I had his name, my husband thought maybe the information was in a red folder. A clue! We combed through our files and neither of us could find the elusive red folder, so next we headed to our apartment’s storage area and started opening plastic crates. Success! In a stack of old tax returns was a maroon folder that did indeed have our wills. It’s now in the file where it belongs and all three kids have a one pager with everything they will hopefully not need for a very, very long time.