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Financial planning not to be dictated by single person

A single person handling finances can be disastrous in the case of sudden death.

Financial planning is very often dictated by a single person, more likely the eldest male earning member, while others have no knowledge or call in the matter. Experts are of the opinion that this may not be the best idea at all, especially in case of the sudden passing away of the lead member.

Penny Di Giovanna, a certified financial planner in a column in Kiplinger, says that to pre-empt such a situation, no two members of a family or a couple have to be equally proficient in economic matters, but they should be able to understand the basics of their financial condition and decision making.

For starters, for this one-person show to change, Di Giovanna suggests that families should have financial goals, to begin with, to increase a sense of ownership and involvement. The goals can be as simple as owning a house or planning the next vacation.

Then she suggests that dividing responsibilities can be the next step that will initiate participation. So, it may be that one person is better equipped to deal with taxes, while the other can pay bills monthly and investments can be discussed among members rather than all being dealt with by the same person.

For couples, she says that it’s always better that both parties attend meetings with the financial advisor even if all parties are not equally interested.

Matthew Gaffey, another certified financial planner, was quoted in the Insider saying that money is an essential part of staying together and couples will do well if there are clear lines drawn at the outset. This discussion beforehand can prevent any argument over discretionary spending.

Another key piece of advice often shared is that couples who have a considerable amount of shared expenses should consider having at least one joint account and two separate accounts for their respective non-essential spending.

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