Get on top of your finances
08 Apr 2019
As we get older, it’s important that we don’t keep any financial secrets – from our partners or our children. Follow these simple steps to financial transparency.
Does your spouse or partner know more about your finances than you do? As you age,
it’s important to have all the information in case of emergencies. Here are six things you can do to be prepared for the unexpected.
1. Make a list
A good idea is to start by making a list of all your assets, liabilities, insurance policies and other financial information such as your tax file number and Centrelink or DVA client reference numbers and keep it in a file that’s easy to access. Keep both a hard copy
and an electronic copy in secure places such as a locked filing cabinet or safe deposit box.
The file should include information such as:
• The financial institution, account number, name of the account and the date it was opened;
• The insurance policy provider, policy number, the date the policy was commenced.
Don’t forget any bills or financial information that arrive via email and don’t include any PINs or passwords in the files.
Increasingly, you may have to think about social media accounts
as well.
2. Gather your documents
Along with the list of financial details, it helps to put key documents in one place. Along with birth and marriage certificates, these may include house deeds, insurance policies, superannuation and investment documentation such as securities, share certificates and bonds, as well as any pre-payments of funeral investments. Of course, your will, enduring power of attorney, and advance healthcare directive should be part of the document pile.
3. Simplify your financial arrangements
Over the years we can accumulate several bank accounts, credit cards, and various investments. As we age it can be helpful to simplify our financial arrangements to make it easier for someone else to manage if the unexpected happens.
So consider these steps:
• Consolidate the number of transaction accounts;
• Reduce the number of credit cards and store cards you have;
• Close your cheque account;
• Make a list of your monthly, quarterly and annual bills and when they usually arrive;
• Have a system for recording when bills are paid so someone else can easily track what is still owing;
• If you have direct debits or direct payments of credit cards, donations to charity, subscriptions or memberships, make a list of these together with renewal dates or if they are automatically renewed.
4. Meet the advisers
If your other half usually makes solo appointments to see the accountant, stock broker or financial adviser, ask if you can be included in future meetings. It’s a chance to become more familiar with your financial arrangements as well as the person providing you with advice on your financial affairs.
5. Express your wishes
While you may have both written a will, has your other half created other documents to express their wishes? An enduring power of attorney legally allows someone to take care of your financial affairs if you lose capacity. In some states, you need to appoint someone separately to make medical decisions on your behalf.
Another way to ensure the unexpected doesn’t create additional stress for your surviving spouse or partner is to pre-plan and prepay for your funeral. At the very least, have some funds ready to cover such costs.
6. Have cash at the ready
When someone passes away there is often a lag of several weeks before a death certificate is received. One Victorian financial planner dealt with a client whose husband passed away leaving the bulk of their money in an account in his name rather than their joint account. It was quite stressful when she received the bills from the funeral director as there wasn’t enough money in their joint account to cover the cost.
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