In the latest Weekly Wright Report:
- Empowering Relationship Decisions through Financial Literacy – read now
Empowering Relationship Decisions through Financial Literacy
Many marriages operate like a partnership with duties divided between spouses, especially when it comes to raising a family. Examples are picking up and dropping off children for school, play dates, and extracurricular activities; making lunches while the other parent is preparing breakfast to get out of the house in the morning; shopping for necessaries and keeping track of and scheduling necessary doctor appointments; arranging play dates and researching extracurricular activities. While the above list is not exhaustive, it highlights the effort and coordination it takes to run a household, especially one with children.
Not only does it take coordination and cooperation to run a household, it takes money. It is difficult to know what a reasonable amount to spend on household expenses is if one spouse or the other pays bills and manages investments and does not share information, either willingly or unwillingly. Some people are just not interested, presumably because they think the bills are being paid and savings are being accumulated. Unfortunately, that is the case in many households. Money or disagreements regarding money are among the top ten reasons couples name for eventually divorcing.
Even if your marriage is in good shape, it is important to be informed about finances. If you had to suddenly take over for a sick or injured spouse, or worse, a spouse who prematurely dies, how would you function? It is a question everyone who is not involved in their family finances should be asking themselves.
It is not uncommon when parties separate, that one of the parties has no idea about their finances. That is a paralyzing circumstance and can stop an unhappy spouse from leaving a marriage that is no longer working. Income can be easily ascertained by reviewing filed tax returns and the schedules filed with them. Likewise, checking accounts and credit card statements can tell the story of the expenses of a household, month after month. If a spouse is self-employed the revenue and expenses are recorded on the Schedule C. Carefully reviewing the Schedule C may turn up expenses that are actually personal. Personal expenses are disallowed if proven, thus income is technically increased for the calculation of child support and alimony if those will apply. Interest and dividend income on Schedule B will tell if there are brokerage or bank accounts. Furthermore, capital gains and losses on Schedule D can provide more information regarding assets and additional cash. Even if there is a stock loss reported, funds in the form of cash were received at the time of the sale. Your tax return will report such a number.
If you are an unhappy spouse contemplating divorce, and are devoid of knowledge of your financial situation, take the time to look at information that should be readily available to you. Knowledge is one of the keys to empowerment. Understanding the family finances can be the beginning of such empowerment.
If you are in need of a consult or legal advice, please feel free to reach out to the lawyers of Wright, Constable & Skeen, LLP. I can be reached at 410.659.1389.
Want more? Visit the Weekly Wright Report page to browse past issues.