OPINION | SAVE YOURSELF: Stop putting it off: Organize finances

It's time to get financially organized, and trust me that this is an all hands on deck effort.

I am very comfortable with division of labor when it comes to money. We live in a busy world, and one spouse taking on "money" doesn't mean the other is by default disinterested or willfully avoiding tasks. There are too many things for a couple to handle, especially with jobs and family, and so if one spouse or partner raises their hand to take on the finances, from paying the bills to investing for retirement, we call that -- handled.

The issue comes when there is a division of communication on money.

Except for ordering passports, the times we need to know things or get our hands on important papers like birth certificates or find that power of attorney or hunt down a life insurance policy, we are often in crisis. If we are the spouse who knows where everything is, no problem. But if we are the spouse in the dark, it can be a big problem.

[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=7aOdPIpOxiM]

This kind of communication on money is different and, in many ways, easier than communicating about how, and how much to save and how to invest savings. Consider this the logistics of money.

Susie Smith, a banking executive, has seen the fallout from avoidance of the logistics of money, particularly for women who are widowed or divorced. She believes spouses should meet semi-annually about their money. In her opinion, "Financial knowledge gives you peace of mind in addition to building trust between partners. I encourage every couple to review their financial foundation together on a regular basis."

Get into the weeds in the discussion. Who do we do business with for insurance or investing? How do you pay the bills? Do you write a check for this bill? Is it auto drafted? Do you use a credit card? Does this utility or lender communicate with you via email? In an emergency how do I access your email? Do I have authorization on the account?

You could stop here. You can see the landscape, take a few notes, and get on each other's calendars in six months. But what if you went a small step further and got organized together?

Serious disclaimer alert. Remember, I am a recent inductee to the lifetime neat and tidy club. While I can claim this title, it was a hard fought, 40-year battle. All this to say, I am not naturally organized. Maybe this is less of a disclaimer and actually more of a promise. If I can find a way to hack ten years as a financially organized married person then you can too.

My business partner, Tim Quillin, crafted an order of priority for money logistics called "PPOW" (Passwords, Papers, Ownership, and Will/Trust), and I recommend working down the list in each of your semi-annual meetings (or knocking it out at once!).

  1. Passwords. As Susie Smith reminded me, in the past you could kind of get away with being in the dark about what bills needed to be paid or where to find life insurance policies and investment accounts, because they arrived in the mail. Think of it like little paper breadcrumbs. But we are in a largely paperless world where dreaded passwords come into play. If your spouse has a password keeper then there is your digital version of breadcrumbs.

All you have to do is get the master password to the password keeper. (Note to self: never lose it.)

When you log in you can see every financial institution, credit card and subscription in one spot.

Go get a notecard and write the password down on that notecard in your meeting. Then place it in the front of the notebook you are about to procure for step 2. If you don't have a password manager, I do recommend Last Pass, but there are lots of great ones, like 1Password and Dashlane. It took about 2 years to get all our passwords into Last Pass, but now that they are there, gosh, it's practically a religious experience just to open the program and see all the (correct) passwords to every website I need to get into.

  1. Papers. Get your important papers together and put them in a notebook. Trust me it does not need to be fancy or perfect. I do have a few tabs to make it easy to find things, and they are: insurance (car, home, life), financial assets (savings and checking accounts, retirement accounts, brokerage accounts, etc.), home (mortgage, deed, various warrantees), car (title, loan docs), important docs (birth certificates, Social Security cards, notarized will, healthcare proxy, power of attorney, etc.), and then miscellaneous. Once you get your tabs then purchase clear sheet protectors and go to town. Remember, for most of this you just need breadcrumbs. For instance, sure it would be great to have your actual auto insurance policy, but if all you have right now is just the bill for last month's premium then throw that in there. You can always replace it later. This notebook will only get better and more accurate over time.

One of the biggest questions people have is which mail to keep?

Most should be shredded or thrown away. People don't have the problem of keeping too little. They keep too much. Then it's harder to find what's important. With this system you can just replace statements as they come in, hence using the clear sheet protectors to make that task easy. And now you have the added bonus of eliminating that "pile" that you will surely get to "one day."

Where to put the financial notebook? Yes, of course you can do this perfectly and buy the fire safe document storage. But the question to ask is how likely will you act quickly on this task? Also, what is the likelihood of fire or theft destroying this notebook? I am less concerned about destruction of the notebook as I am loss of it. So I picked one shelf in my house for my non-descript notebook and told two family members where to find it. We don't move it. Again, I am less worried about someone stealing it or it getting destroyed as I am about someone not being able to get their hands on it in an emergency.

  1. Ownership. How are your accounts titled? This is not legal advice, but many estate planners do recommend that you try and get both of your names on accounts where possible. Update beneficiaries on retirement accounts. On 529s, consider going the extra step to name a successor account owner.

  2. Will or trust. Make the appointment with an attorney and just call it handled. Sure, they ask you to think about pretty heart-wrenching things, but we have to do it. I see parents agonize over some of the questions about where kids should live if something happened to them and a number of little details. All the while the most dangerous reality is that in the intervening months or years of indecision they are ceding all thoughtful decision making to people who know their kids less than they do while those wills or trusts are delayed for perfection. Get. It. Done.

"PPOW" it all out. As soon as you finish your cup of coffee and/or this column turn to your spouse and ask to get a meeting on the calendar. Clear the distractions, book a babysitter, and have your first meeting of the business side of your lives.

Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.

Upcoming Events