While in San Diego recently, I took an Uber ride. (On a disappointingly aborted trip to take a couple of awesome 93-year-old women out to lunch in La Jolla.)
As I’m sure most people do, I asked the young woman driving why she was driving Uber. What she was going to use the extra money for? (Do most people ask this? Or is it the financial planner in me that makes me inappropriately nosey?)
She explained that she and her boyfriend planned to combine their finances and she wanted to pay off her debt before they did that. How responsible! How prudent!
“Yeah. He likes all that financial stuff so I can’t wait to just give it to him and say Please! Take care of it!”
Screeeech! Not the car…my brain.
I almost involuntarily spat out, “Oh GIRL, you can’t do THAT!” She didn’t get why I was suddenly so agitated. So I explained that while she can have her boyfriend lead the charge, do the administrative dirty work with their finances, she shouldn’t MUSTN’T abdicate responsibility for her own money.
It doesn’t matter that her boyfriend is an upstanding guy. And in all likelihood always will be. Sure, there are the schmucks out there who will outright rip you off, but as I wrote about in my blog piece about trust, it’s not the criminals I’m particularly worried about. It’s the perfectly legal advisors (or boyfriends in this case) who do stuff with your money that’s not in your best interest.
Why You Must Be Involved
The problem is simply that your opinions, preferences, goals, and values won’t be reflected in your (joint) finances if you’re not involved in the decision making and if you’re not up to date on what your finances look like, what’s happening to them, and why. And you know what? Men might on average feel more confident about money, but that in no way makes them more competent about money. You might actually disagree with his analysis and simply know better.
She, still to my surprise, seemed a bit surprised by my adamance, and frankly way too resistant to the idea for my comfort, but I’m not her mom. So I left her with the recommendation that she at least read a book about couples and money.
I was so taken aback by this 1950’s housewife stereotype at play that I waved my hands around about it for days afterwards. But it occurred to me that it’s a problem for my profession, too.
Certainly I want you to know if your advisor is doing something criminal or inappropriate-but-legal (expensive mutual funds, frequent trading, life insurance products you don’t need, charging you a lot but not providing much value). But even the most morally upright, competent financial planner can’t do what’s best with your money if you’re not involved. We bring the technical competence, you bring the You.
How can you know if what your advisor is doing is right for you? Ask questions. General, specific, why, how, when. A good financial planner relationship should have a solid dose of education for clients. If you don’t understand something, ask about it.
You don’t need to know the tax table for 2016, but you do need to hear why your advisor is suggesting a traditional IRA instead of a Roth IRA. If your advisor hesitates or gets annoyed when you ask questions, I hereby give you permission to be uncomfortable and suspicious.
[And feel free to replace “advisor” with boyfriend, girlfriend, husband, wife, mother or father. The message doesn’t change.]
How to Learn More About Personal Finances
If you feel that you’ve abdicated responsibility for your own finances out of ignorance or fear, here are some simple, entertaining reads that should quickly give you the basics:
Books:
Personal Finance for Dummies (yes, really)
The Little Book of Common Sense Investing
Websites:
XY Planning Network’s Consumer Blog (note: I’m an associate member and have written for the blog)
Question: How have you abdicated responsibility for your financial well-being? What’s the first thing you’re going to do to take it back? You can leave a comment below.
Do you want an expert in financial planning who will also be your partner in a journey to financial success and security? Let’s talk. And I mean really talk. Reach out to me at or schedule a free 30-minute consultation.
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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner and/or an accountant for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.
