finance

An expert's guide to getting your finances in order as a stay at home mum.

Once Upon a Time, a woman walked into a bank. The bank rejected her card. The bank explained that her ex-husband had deleted her from the account, because she was just a signatory on the account, not an actual account holder.

The woman walked out of the bank, with $47.50 in her wallet. Her divorce lawyer spent years chasing her portion of the money in that account.

The lawyer discovered that the ex-husband’s business had a huge tax debt and overdrafts that the woman had unwittingly signed for a decade ago.

The woman did not end up marrying that divorce lawyer as Charlotte did in Sex and the City, but went on to take great care of her financial health and independence henceforth. The End.

This is actually not a fairy tale, but a true story; one that in my many years of advising women during their divorces, I have heard repeatedly.

Although the details may differ, I’ve noticed over the years that once many women become Stay At Home Mums (SAHMs), and their husbands become the sole family income-earner, the “finances” become the husband’s domain.

I know some SAHMs run the household bills, but the husbands generally seem to be the ones who have control/understanding of the full picture.

Watch Kochie and Libby share tips for managing money. Post continues after video. 

Let me stress generally, and in my experience – I’m not saying this is true of all SAHM families.

And I certainly don’t mean this as a criticism; especially after a couple has kids, it is common, and totally natural, for adults in a relationship to have defined and differing roles and contributions.

None of my clients have been silly women – they have just been very busy women who have trusted their husbands to hold up his end of their deal.

I know a few of my clients even signed documents committing to thousands of dollars of debt that were casually presented to them whilst wrangling a baby out a high chair, or just before bed.

Sometimes, that’s just marriage for you.

But the risks of this division of labour can become apparent at other times, not just in the situation of people who are divorcing.

Anything can happen to anyone, at any stage. I had a client, a young father under forty, who died suddenly and left behind a pregnant wife and two kids. His wife had been “taken care of” for most of their marriage as she concentrated on the children, but an unfortunate consequence of his death was that the wife was now forced to face the financial aspect of their relationship with little prior knowledge – she didn’t even know how much their mortgage was.

Another client was left in a similar position after her de facto was involved in a motorcycle accident, and she found that the banks wouldn’t even speak to her because they were not actually married.

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Last week saw the end of the 2015/2016 financial year, and a bunch of my SAHM mates were all sighing about how the husbands were MIA because of tax time, and “thank god” they didn’t have to worry about all that administration and extra work concentrated into a few weeks.

But I was sighing (politely, in my head) for a different reason – I’ve seen how this attitude can work out disastrously – and I certainly don’t want that to happen to any of my friends.

I know that at the end of long days, when the kids are finally horizontal and silent, most of us would rather talk about a billion other things, or not talk at all (and I mean fall into a stupor on the sofa, not sexy time)… but it has to be done.

Here are some basic things to discuss if you are not the one in the relationship who takes care of the overall finances:

'A bunch of my SAHM mates were all sighing about how the husbands were MIA because of tax time.' Image via iStock.

1. If your partner runs their own business: make a list of any company names that are involved.

Their Australian Business Numbers, Tax File Numbers (yes, there is a difference), and find out who the directors are. Many spouses are the company secretary of the family business – if you agreed to that at some time in the past, perhaps revisit it so you fully understand what it means. Any business would have creditor and debtor ledges – are they on the computer, or in hard copy at the office? Ask your husband to let you know from time to time if there are any major debtors or creditors (people you owe money to, or who owe you money) that you need to know about in terms of the business’s cash flow.

2. Are there main contacts you need to know? Bank manager, accountant, lawyer?

3. If you aren’t involved in paying the bills – do you know what your monthly rent/mortgage is?Utilities and other basic bills? What is the minimum you would need per month to maintain your lifestyle?

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4. If your partner is employed – do they salary sacrifice?

5. Where is your partner’s superannuation? Does it have a life insurance component? Who is the nominated beneficiary of the policy?

6. Do you know all of the relevant bank accounts - their numbers, and if you have any authority to deal with things?

'Are there main contacts you need to know? Bank manager, accountant, lawyer?' Image via iStock.

7. Truly understand any documentation that apparently needs your signature – before you sign it.

If you don’t have an independent income, are you sure that accepting responsibility for a loan in your name (or partly in your name) is absolutely necessary?

8. Consider having a Power of Attorney drawn up, especially if you are not married.

This can give you power to deal with banks and business affairs in the event your partner is unable to.

9. Both partners in a financial relationship should have independent wills.

Note that points 5 and 6 don’t have to cost you a lot of money – you can buy document kits at Australia Post that you can complete yourselves and will give you basic coverage.

These are just some basic discussion tips to help you get a better understanding of your financial position.

No matter what your set up, anyone financially involved with another person needs to understand the full picture as a fundamental (and admittedly often boring) part of being a functional adult. So grab a bottle of wine (or an energy drink to stay awake) and start talking.

Nama Winston is a former solicitor who now shares her experiences through her freelance writing.
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