SheKnows sits down with personal finance expert Carmen Wong Ulrich to discuss what housewives need to know about their financial lives.
While many couples in the U.S. are dual-income households, there are still plenty of stay-at-home parents and housewives (or househusbands) who focus solely on managing their homes. Navigating a one-income household can often change the dynamics of a household’s financial balance of power and sometimes the nonincome earner can be left out of important financial decisions.
SheKnows talks to celebrity finance expert Carmen Wong Ulrich to find answers to some of the most pressing questions for couples with a stay-at-home spouse.
Common money mistakes and financial traps
SheKnows: What are the most common financial mistakes you feel housewives make?
Carmen: “Just looking at the household budget and planning and not being a part of retirement planning and strategy as well. I hear from many nonworking or part-time working wives and moms who say they just don’t even know how much money is saved and where it is. That’s your money too!”
“Maybe not all of it, but some of it, and you need to be a part of not only the decisions about it but you need to know where that money is. I also unfortunately hear from working husbands that they ‘don’t need’ their wives to ‘know where the money is.’ Or, they’re ‘glad she doesn’t know!’ Trust me — you need to know!”
Joint or separate bank accounts?
SheKnows: Are you an advocate of joint or separate financial accounts for couples? If joint, when is the best time to join bank accounts?
Carmen: “Joint bank accounts if and only if you’re on the same page when it comes to what this account is for and who is responsible for putting in what.”
“For example, it can make sense to have a joint household account for household bills only. And, possibly a joint savings account for joint household goals. But, you need to agree on who puts in what percentage. For example, if you earn 30 percent of the joint income, you put in 30 percent of the total household bill tally each month.”
“I definitely recommend having your own accounts at all times, no matter how long you’ve been together. You’re a grown-up — you can have your own money! Autonomy is important. But, if you have a family together under the same roof, the family bills should be the priority, then you can sock funds away for yourself.”
SheKnows: Are there any finances that should always be kept separate?
Carmen: “Keep wills and trusts separate. Too complicated to untangle should your marital status or wishes change. You should always at least have some cash in your own name, a credit card (or two), and even if you’re a stay-at-home spouse, some retirement savings.”
The 2009 CARD Act: Housewives and credit cards
SheKnows: What do housewives need to know about the recent changes to the Consumer Financial Protection Bureau’s (CFPB) credit regulations? For example, we’ve heard qualifying income now must be based only on the individual’s income, which can hurt housewives when applying for credit. Is this true for couples that are married but are one-income households?
Carmen: “Exactly — this was a consequence of the CARD Act [Credit Card Accountability Responsibility and Disclosure Act of 2009] and was originally targeting the excessive selling of credit cards on college campuses.”
“However, the CFPB is pushing the change that stay-at-home spouses can indeed get access to credit (and even in their name only) even if they do not earn income — the provision being that the household budget is where the income goes and exists to pay the bills. Access to credit for a nonworking spouse is vital. It gives autonomy and in some unfortunate cases, is a ticket to freedom/escape.”
Thank you so much Carmen for your wonderful advice! Keep an eye out for our next personal finance discussion with Carmen Wong Ulrich, which will focus on housewives and insurance: What to know, how much to have and when to purchase it.