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Managing your household finances

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A Chinese couple take a ride on a glider hooked up to a cable, over a ski resort in the suburbs of Beijing (GOH CHAI HIN)
A Chinese couple take a ride on a glider hooked up to a cable, over a ski resort in the suburbs of Beijing (GOH CHAI HIN)

Home Cents

Family finances: Flying solo or with a co-pilot? Add to ...

A few weeks ago, I wandered into our home office as my husband was working on our tax returns. I peeked over his shoulder and, unwisely, started asking some questions. I just wanted to make sure he was capturing all of the deductions we could claim.

My interruption clearly annoyed him. My husband files our taxes every year and did not want my help. He has staked a claim to this particular territory of our finances. I backed off.

The truth is that most couples establish well-defined boundaries when it comes to managing money in the home.

One couple I know, professionals with two children, divides their household finances into short-term and long-term duties. She manages the day-to-day tasks, paying the bills and keeping track of their monthly budget. He is in charge of their financial future, managing the investment portfolio, RRSPs and RESPs.

As self-described "type A personalities", the division of work lets them each control a portion of their finances while staying in their comfort zones. The husband has a business background and has been investing since he was 17. The wife put herself through university working at a bank and likes the transactional side of money management.

"You have to understand your own skill set and your own comfort and not feel guilty about it," she says. "But you also have to be very trusting of your spouse."

Consult, Discuss, Decide

At the end of each month, she updates him on their household budget. He often talks to her about his investment strategy. They discuss major changes to their portfolio together.

In other relationships, all of the money management is delegated to one partner.

One friend with an accounting background has taken complete charge of her and her husband's financial affairs. "He's basically only involved in money issues when it is a large decision, such as the mortgage. Otherwise, everything falls on me and he doesn't care."

Her husband runs his own business and manages the office expenses, so has little time for household finances. My friend doesn't mind the responsibility but admits that sometimes her husband "doesn't understand why the money is being spent so fast because he doesn't look at the bills."

Another friend who manages multi-million dollar budgets at her marketing job lets her husband handle their personal budget. "I'm pretty much out of the loop, which is the way I like it," she says.

Patrick Gossage, chair of public relations firm Media Profile, is another spouse happy to relinquish the reins of household finance.

"Like many irresponsible men, I married my wife 40 years ago with major debts and no sense of where my money was going," he says.

"My wife, a frugal and organized sort, after several more years of crashing household finances simply forbade me to have anything to do with family finances and put me on an allowance. I now receive a pension cheque which I consider 'my own' money -- otherwise, I know little about family finances except they are in good hands and we have never been in serious debt since."

Don't Go It Alone Entirely

Although some couples divide money duties equally, most fall into the latter camp and delegate responsibility, according to Patricia Domingo, an investment and retirement planner at RBC.

"Usually, someone manages all the money and makes all the decisions and the other person can't answer any questions about it," she says. "If it's a good relationship and there's a lot of trust, that's alright. The negative side is when there's a breakdown in the relationship and the person is just lost."

Ms. Domingo recommends that each spouse have an understanding of the household finances, so that each is prepared to manage independently in the event of a death or separation.

She suggests couples review their financial situation together at least once a year. "Have that open conversation to understand where you stand financially."

Having two sets of eyes on the family's finances will also help reduce any errors in paperwork or missed opportunities for savings. "It's hard for one person to focus on everything," Ms. Domingo says.

Perhaps next tax season I can suggest to my husband that I can be of help. In the meantime, I'll just hope he got all of our deductions right.

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