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In this episode, I’m joined by Sara Gelsheimer, Senior Wealth Manager at Plancorp, to discuss the importance of both spouses being involved in their household’s financial decisions. While it’s common for one person to take on the CFO role in the household, we explore the risks when only one spouse manages the money as well as the steps both the CFO and non-CFO spouse can take to stay informed.
Sara shares real-life stories, actionable tips, and important resources that can help couples navigate financial conversations and prepare for the unexpected.
Here are my notes from our conversation…
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The Risks of Having Only One Financial Decision-Maker (00:04)
It’s common for one spouse to take on the responsibility of managing the household’s finances—paying bills, managing investments, filing taxes, and budgeting. But if the CFO spouse were to pass away or become incapacitated, the non-CFO spouse could find themselves in the dark about key financial details, making an already stressful time even more difficult to navigate.
This issue is particularly prevalent in older generations, where traditional gender roles often dictate that the male partner assumes control over financial matters. Because women tend to live longer than men—outlasting their spouses by an average of five to seven years—this reality presents a significant financial challenge for widows or women going through a divorce, as they may be forced to manage finances for the first time when they are already dealing with the emotional strain of such life changes.
The risks are further compounded by the complexity of modern financial landscapes. Investments, retirement accounts, tax strategies, and estate planning often involve intricate details that can be difficult to grasp without prior involvement. Sara explains that when someone is thrust into managing finances without having a basic understanding of these elements, it can lead to poor financial decisions, missed opportunities, and increased anxiety.
Beyond these logistical concerns, there is also an emotional risk to consider. Financial independence and literacy are empowering, and when one spouse is left out of these discussions, they may feel disconnected from their household’s financial goals. This can create a sense of dependency and insecurity, which can further intensify in times of crisis.
Key Statistics on Women and Financial Literacy (02:24)
Not only do women outlive men, but many women tend to marry older men, which only increases the likelihood that they will need to take charge of the household finances eventually.
Additionally, Sara brings up the rising phenomenon of “gray divorce,” a term used to describe divorces among couples aged 50 or older. In fact, gray divorce now accounts for nearly 40% of all divorces. The emotional and financial fallout from a late-in-life divorce can be substantial, especially for women who have not been actively involved in managing the couple’s finances. Divorce introduces complex financial decisions—like dividing assets and managing retirement funds—at a time when many may not feel equipped to handle such challenges.
Sara emphasizes that these trends culminate in a staggering statistic: about 85% of women will be solely responsible for their finances at some point in their lives. Whether due to widowhood, divorce, or other life events, most women will eventually need to take the reins of their financial situation, often under challenging circumstances. Sara drives home the point that it’s far better to be prepared and knowledgeable in advance, rather than having to play catch-up while grieving or dealing with a life-altering event.
She also touches on some specific challenges that disproportionately affect women financially. For example, women tend to have higher healthcare costs due to their longer lifespans. Many women also take career breaks to care for children or aging parents, which can reduce their lifetime earnings, retirement savings, and Social Security benefits. These factors contribute to what Sara describes as “headwinds” that women must navigate in their financial lives.
Further complicating matters for women is they generally are more conservative with their investments. While a cautious approach to investing isn’t inherently bad, it can result in lower long-term returns, which can be detrimental when combined with the other financial hurdles women often face.
What I found most interesting, though, is the evidence Sara shared on women possessing more financial knowledge than they give themselves credit for. In one study of women given a financial literacy test, they frequently answered “I don’t know” when it was an option. However, when that option was removed, women answered correctly more often than not. This suggests that many women are more financially literate than they realize, but suffer from a confidence gap. Sara passionately encourages women to trust their instincts and realize that they are capable of understanding and managing their finances effectively.
The Benefits of Both Spouses Being Financially Informed (04:41)
Money is one of the top stressors in relationships, often leading to disagreements or misunderstandings. By having regular conversations about finances, couples are more likely to be on the same page regarding their goals and how they plan to achieve them. This openness can eliminate much of the friction that often arises from financial decision-making, leading to a more harmonious partnership.
From a practical standpoint, being on the same page financially also increases the likelihood that couples will achieve their shared goals. When only one partner is handling the finances, they may not fully communicate why they’re making certain decisions or how these choices fit into the couple’s broader financial objectives. By engaging in regular discussions, both spouses can align their priorities, creating a unified strategy for reaching their financial milestones. Whether it’s saving for retirement, paying off debt, or investing in a family business, Sara points out that shared financial knowledge makes goal-setting more attainable and realistic.
Throughout the episode, both Sara and I point out that life is unpredictable. If something were to happen to the spouse who handles the finances—whether it’s an unexpected illness, accident, or death—the non-CFO spouse could be left scrambling to figure out the family’s financial landscape. Having both partners at least generally aware of their assets, liabilities, and key financial documents ensures that if a crisis occurs, the surviving or remaining spouse won’t be blindsided by the need to make quick, uninformed decisions.
Sara explains how clients frequently tell her that they feel a sense of relief once they start having these conversations with their spouses and sharing the responsibility of managing finances. This “peace of mind” is a recurring theme she hears from clients, underscoring how financial knowledge can alleviate stress and anxiety for both partners.
Real-Life Examples of Preparing Non-CFO Spouses (06:16)
In her years of experience, Sara’s seen firsthand how much of a difference it makes when both spouses are financially informed, especially in situations where couples face significant life changes, such as divorce or the death of a partner.
One story she shares involves a couple in their mid-seventies. The husband had always handled the finances, managing everything from tax preparation to investments and bill payments. As a self-described DIY investor, he had only occasionally sought advice from a stockbroker. As he got older, however, he recognized the need to prepare his wife (the non-CFO spouse) for the possibility that she might one day have to manage their finances alone. His primary goal in seeking a holistic financial advisor was to find someone his wife would feel comfortable with if something happened to him.
As Sara recounts, once the couple began working with an advisor, it became clear that there were several financial opportunities they had not been taking advantage of. Tax planning strategies, charitable giving options, and estate planning techniques that the husband had not previously considered were now being implemented, benefiting their financial situation significantly. This unexpected upside was a pleasant surprise for the husband, who initially thought the advisory relationship was solely for his wife’s benefit after his passing.
But the real impact of this preparation became apparent when, unfortunately, the couple eventually divorced. Though it was an emotionally difficult process, the wife was able to navigate the financial side of the separation with much more confidence and clarity because she had been involved in their financial planning discussions for several years. Sara highlights that this foresight was critical: “She’s told me numerous times how grateful she is that we spent the time preparing her. I can only assume the process would have been far worse had she not had that knowledge and understanding before the divorce.”
This example underscores how empowering it can be for the non-CFO spouse to take an active role in understanding their financial picture, even if they don’t manage the day-to-day details. In contrast, Sara also shares examples of women who didn’t come to Plancorp until after they had lost their spouses. For these clients, the process of grieving was compounded by the overwhelming task of piecing together their financial situation for the first time. Without the foundational knowledge of their finances, these women faced an uphill battle, often struggling to make sense of unfamiliar documents, accounts, and decisions—all while dealing with the emotional weight of loss.
This stark contrast between prepared and unprepared non-CFO spouses highlights a critical lesson: it’s much easier to manage life’s transitions—whether through divorce, the death of a spouse, or another major event—when both partners have been involved in financial planning from the outset. Preparing the non-CFO spouse for the possibility of managing their finances alone not only reduces stress but also empowers them to make informed decisions and maintain financial stability in the face of uncertainty.
Actionable Steps for the Non-CFO Spouse (11:05)
Sara frequently hears statements like, “I’m just not good with numbers,” or “I don’t like dealing with finances,” particularly from women. She urges them to challenge these self-perceptions.
Sara offers a straightforward approach for the non-CFO spouse to get a handle on their household finances, using the analogy, “You don’t have to know how the watch works; you just have to know how to tell time.”
Here’s how non-CFO spouses can start:
1. Understand the Money Flow: Get a grasp on the household cash flow—what’s coming in and what’s going out each month. This doesn’t have to involve creating complex budgets. Simply reviewing bank statements and credit card transactions regularly can provide a clear picture of spending and income patterns.
2. Identify Assets and Debts: Know what you own and what you owe. This includes familiarizing yourself with different types of accounts, such as retirement accounts, taxable investments, and real estate holdings. Similarly, it’s important to understand liabilities—whether it’s a mortgage, car loan, or credit card debt. Being aware of both sides of the balance sheet is crucial.
3. Locate Important Documents: Make sure you know where to find essential documents like life insurance policies, wills, trusts, and powers of attorney. While it may seem daunting, Sara stresses that you don’t need to understand every legal detail—just knowing where the documents are and what they generally entail is enough.
4. Know Your Team of Professionals: Sara points out that having a clear understanding of who your financial professionals are—and how to contact them—is vital. This includes your financial advisor, insurance agents, tax preparer, and estate attorney. Knowing who to turn to when questions arise or if something happens is key to feeling prepared and confident.
Sara emphasizes that you don’t need to be a financial expert to play an active role in household finances—just having a foundational understanding of these elements will go a long way in building confidence and ensuring peace of mind.
How the CFO Spouse Can Help Their Partner (14:48)
Sara also shared a few important ways that the CFO spouse can help their partner feel more confident and involved in the financial decision-making process.
One of the most practical tools she mentions is the Estate Planning Memo, a document that compiles all of the essential financial details of the household into one place. Sara suggests downloading this template, filling it out together, and ensuring that both partners have a copy.
The memo covers everything from assets, debts, and insurance policies to estate planning documents and the professionals on their financial team. It’s a powerful resource that provides clarity and security, especially in the event of a tragedy. By having this document completed and updated regularly, both spouses can feel at ease knowing that all the key financial information is in one easily accessible place.
Sara also stresses the importance of having regular financial conversations. These discussions don’t have to be overly formal or lengthy, but they do need to happen consistently. Sara shares a personal example from her own life, explaining how she and her husband schedule “money dates” to review their finances.
These money dates offer a structured opportunity for both spouses to engage in their financial situation, aligning on goals, reviewing accounts, and discussing budgets and any upcoming decisions. For the non-CFO spouse, this provides a learning opportunity in real time, allowing them to become more familiar with the financial details without feeling overwhelmed.
Lastly, Sara encourages everyone to consider working with a financial advisor—especially one that both partners feel comfortable with and takes a holistic approach. “There’s so much that you don’t know you don’t know,” Sara says, underscoring how a good advisor can help uncover blind spots in tax planning, estate management, insurance, and charitable giving.
How to Choose a Financial Advisor for Both Spouses (18:33)
Sara emphasizes that selecting the right financial advisor is not just about managing assets but about finding someone who can work with both spouses, particularly if one of them is less involved in the household finances. For the non-CFO spouse, this connection can be especially important if they need to lean more heavily on the advisor after a loss or during a divorce. Sara points out that more than 75% of women leave the advisor their husband had after death or divorce.
The first key quality Sara highlights is the holistic approach that a good advisor should take. A financial advisor who focuses solely on managing investments is leaving much of the financial picture untouched. “You want someone who can look at everything—your estate planning, insurance, tax strategies, charitable giving, and more,” she says. The advisor should be able to provide guidance on how all these areas interact and impact your overall financial health. This comprehensive approach ensures that the non-CFO spouse, who might not be as familiar with the intricacies of these areas, has someone they can rely on for clarity and actionable advice.
Listen: 6 Questions People Don’t Ask Their Financial Advisor, But Should
Sara also stresses the importance of choosing a fiduciary advisor. A fiduciary is legally obligated to act in the best interest of their clients, which should be a baseline expectation for anyone seeking financial advice. However, Sara points out that not all financial advisors operate as fiduciaries, making it essential to ask this question early in the selection process. By choosing a fiduciary, couples can rest assured that the advice they receive is aligned with their best interests rather than the advisor’s incentives.
Listen: Not All Financial Advisors Are Created Equal
Sara also touches on the importance of personality and communication style when selecting a financial advisor. It’s critical that both spouses feel comfortable with the advisor and that the advisor can explain complex financial concepts in a way that doesn’t feel intimidating or condescending. Sara emphasizes that the relationship with a financial advisor should feel supportive and trustworthy, especially for the non-CFO spouse, who may need more guidance as they become more involved in financial matters.
“A lot of it comes down to trust,” Sara says. “The non-CFO spouse needs to feel like they can ask questions without feeling stupid, and they need to know that the advisor has their back.” This level of comfort and trust is crucial because the non-CFO spouse is likely to have more contact with the advisor in the future, especially if they are the one who outlives the CFO spouse.
Listen: How To Interview An Advisor
Resources for the Non-CFO Spouse (22:50)
In the closing moments of the conversation, Sara suggests several resources that can help build confidence and financial literacy, particularly for those who are newer to managing household finances.
First, Sara highlights Plancorp’s InspireHer initiative, a program specifically created to empower women with financial education and resources. “InspireHer is a fantastic resource for women who are looking to build their financial confidence,” Sara explains. This program takes into account the unique challenges and opportunities women face in managing finances and provides tools that resonate more deeply with a female audience.
Sara also encourages non-CFO spouses to follow her on LinkedIn, where she regularly shares short, digestible insights on personal finance. She notes that many people find her LinkedIn posts helpful because they provide a “microblog” style of information—quick, easy-to-read insights that can be consumed in small doses. This is especially useful for individuals who may not have the time or attention span for a full-length book but still want to stay informed and build their financial knowledge gradually.
When it comes to books, Sara kindly recommends my book, Making Money Simple. “It’s a great read for someone looking for an approachable, simplified guide to getting their financial life in order,” Sara notes.
Another book she recommends is Getting Good with Money by Tiffany Aliche (also known as The Budgetnista). Sara describes this book as more comprehensive and in-depth, covering a wide range of financial topics that can help the non-CFO spouse build a strong foundation in personal finance.
Ultimately, Sara’s advice to the non-CFO spouse is to find a learning method that resonates with them and to commit to gradual, consistent progress. Whether through books, podcasts, newsletters, or social media, the key is to stay engaged and curious about your financial life. With these resources, non-CFO spouses can build the confidence and knowledge needed to actively participate in their family’s financial decisions and feel empowered about their financial future.
Resources:
- Follow Sara on LinkedIn
- Estate Planning Memo
- 6 Questions People Don’t Ask Their Financial Advisor, But Should
- Not All Financial Advisors Are Created Equal
- How To Interview An Advisor
- Plancorp’s InspireHer Initiative
- Making Money Simple by Peter Lazaroff
- Getting Good with Money by Tiffany Aliche
The Long Term Investor audio is edited by the team at The Podcast Consultant
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