Family finances: don't keep spouse in the dark

Usually, when this column deals with reader questions, it will put them at the end. The following question is of such importance, we will deal with it right away.

I am a recent widow. My husband (much older than I) did not think it was proper for a wife to know how to handle money. Now I am completely at a loss and unnerved by all the responsibilities of investments - stocks, money markets, etc. Can you please give some simple explanations for questions such as: What is a ''bull market''? Do I pay the broker for each and every maturity date, when Ginnie Mae certificates ''roll over''? If a widow is not temperamentally suited to know and watch the stock market, should she sell out? -B.T.

Before answering the specific investment questions, let me address the broader issue:

Husbands should not think they are doing themselves or their wives a favor by not keeping them continually and completely informed of the financial details that affect them both - bills, savings, retirement plans, investments, and debts.

If either spouse does not understand finances, he or she should be brought into the family's day-to-day financial affairs. Both parties need to be prepared for the possibility that either one of them will have to carry out this chore alone. Simply assuming that because you can handle the family's finances, your spouse can too, may lead to some unpleasant surprises.

It may also lead to your spouse forever having to depend on someone else - perhaps a friend, relative, or a patient and friendly banker - to sort out and keep track of all the things that can make up a family's financial situation.

Sometimes, this may be necessary. There are some couples where one person simply does not understand finances and somehow never seems to get along with numbers. In these cases, the couple should find someone who can be of long-term help. Indeed, this may be that friend, relative, or banker. But it could also be a professional financial adviser, financial planner, or tax accountant. These professionals, or their firms, should be kept reasonably up to date on the family's finances when both the husband and wife are around and should be prepared to step in and help in case of an emergency. You may want to get specific and name this person or firm as an executor in the will.

But, assuming both the husband and wife can handle financial matters, they should take steps to make sure they understand what's going on. We recently heard of a couple that took turns handling the finances. For a few years, the wife would pay the bills and keep track of other expenses and income from investments, then the husband would take over. Recently, the husband passed on, and although his widow had a few specific financial questions to clear up, she is not at a loss as to how to handle her money today. Some financial planners say the trade-offs can come more frequently, perhaps every three or four months.

In another case, that of a retired couple receiving income from several investments, the wife keeps a log of all the dividend payments, noting when checks come in, where they came from, how much they were, and how each quarterly dividend compares with that of the previous quarter. They are then able to make new investment decisions together.

But even if the spouse with less financial experience starts out by doing nothing more than pay the household bills or balance the family checkbook when the monthly statement comes in, both parties should participate in some way. And don't be discouraged if mistakes are made. That's part of learning to handle the money. As long as the other person is there to help correct mistakes, little damage will be done.

One way to look at this might be as a form of insurance. Just as you would not leave your spouse without the financial protection provided by life insurance, you should not leave him or her without the protection provided by knowledge of personal finances.

Now, to answer the writer's specific questions:

- A ''bull market,'' such as we are experiencing now, is one in which stock prices rise over an extended period. Usually this is a period of several months or a few years, not a short-term swing that might last a few days or weeks.

- When ''Ginnie Mae'' (Government National Mortgage Association) certificates , which represent pools of mortgages put together by this agency, ''roll over,'' they are actually maturing. So if you want to buy more Ginnie Maes, you would pay a brokerage commission.

- It is true that many people are not ''temperamentally suited'' to handling stocks, but those stocks may provide part of the income you will need from now on. So before you sell, talk to a broker. If you don't have a broker you like, ask some friends or relatives if they know one they trust. Then interview a few of these brokers or investment advisers. When you find the broker you like, have the broker examine your portfolio. He or she should ask you about your financial needs, how much money you want coming in to meet those needs, and how much risk you are willing to bear. A decison to sell, or to move into some other investment like a mutual fund or certificates of deposit, should be carefully thought out and should fit in with your overall financial objectives and needs.

If you would like a question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.m

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