VOL. 126 | NO. 18 | Thursday, January 27, 2011
Rays of Wisdom
Dana and Ray Brandon
Walk a Mile in That Silo
RAY and DANA BRANDON
Ray’s Take: At the corner of Forest Hill-Irene and Winchester roads, two silos stand side by side. Nothing connects them but the vines that grow rampant in summer’s heat.
This scene is symbolic of many families’ finances. There’s a spouse presiding over decisions such as food, clothes, school supplies, soccer uniforms and piano lessons. Then, there’s the other spouse making sure the mortgage is on time, the insurance is paid and there’s enough going into IRAs, 401(k)s and college funds.
Now back to my original train of thought. They are silos. As close as they are to each other, and as much as they have in common, they often live in two isolated worlds. Neither knows much about the other one’s day-to-day financial life.
I urge couples to walk in each other’s shoes, or with this metaphor, stand in each other’s light.
It’s not uncommon for a husband who’s worried about long-term retirement or saving for college tuition to be clueless about the price of a gallon of milk. Even worse, he could have no concept of how many gallons of milk a couple of fast-growing soccer players can go through in a week.
One spouse may know the price of dance lessons, but have no idea that two recital costumes cost their weight in gold relative to other family goals.
The other spouse may not be aware how much a speeding ticket increased the auto insurance premium, the bite a new health insurance plan is taking out of the family’s paychecks or how much the couple has to accelerate retirement savings to compensate for lower equity returns and a stagnant home value.
With Valentine’s Day around the corner, consider mixing romance with finance. You can “swap” financial responsibilities for a couple months to get a better idea of the other’s world. If you cannot actually swap, at least shadow each other to learn about the other’s daily financial realities. A little understanding will go a long way toward making better decisions for all.
Dana’s Take: There’s another important reason for spouses to exchange financial information: Tragedy can strike any time or anywhere. Imagine yourself hunting for financial information when stunned by a loss, or a relative trying to do it without you.
Show each other your love this Valentine’s Day by making a file with copies of important financial documents and statements. Include locations of lock boxes and keys, storage units, names of banks, investments and insurance with account numbers, websites and passwords. Add advisers’ and attorneys’ contact information. Update the file before every Valentine’s Day.
Make a similar file for your financial planner, lawyer or trusted relative. If tragedy strikes, you can focus on your family’s emotional needs rather than hunting for financial information.
Ray Brandon, CFP®, CFA, is CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s in finance and is a Licensed Clinical Social Worker. Contact Ray Brandon at email@example.com.