When word got out earlier this year that Alicia Keys's new husband, Kasseem Dean (also known as Swizz Beatz) owes $2.4 million in taxes, personal finance educator Taffy Wagner didn’t waste any time getting on his case.
The celebrity couple offered the perfect illustration of why people need to talk about money before they get married. Wagner, an ordained minister known as “Dr. Taffy,” spoke out about the importance of being upfront with your partner about debts and bad money habits. To promote that message, she also recently launched a new website, www.WifeCFO.com, to help wives get on top of their finances. I spoke with Wagner about her new site. Excerpts:
Why did you start Wife CFO?
I’ve mostly taught wives, who are entrepreneurs, women of faith, stay-at-home moms, work-at-home moms and military wives. They wear several hats—including being money manager in their marriage. They were filled with financial anxiety and questions, but weren’t sure where to go for help. I created Wife CFO to be a safe place of encouragement, financial education and restoration.
Do husbands need their own site too?
No, because for years experts have said women control 80 percent of all household spending.
What's different about what wives need to know?
Wives need to understand the significance of being financially sound and ensuring that their families can be taken care of if something happens to the husband. They need to understand savings, investing (whether stock, bonds or even mutual funds), life insurance and disability insurance. Wives as the money managers need to plan ahead knowing they are being proactive and have options instead of being reactive when situations happen.
[For more money-saving tips, visit the U.S. News Alpha Consumer blog.]
What are the top three mistakes married couples make with their money?
1) One spouse having financial secrets and not sharing with the other. Once the secrets are revealed it leads to the other spouse feeling betrayed, looking at the other spouse wondering what other secrets are being hidden and trust is broken.
2) Not openly and regularly talking about their finances unless a crisis happens. Sometimes when a crisis happens before they reach a solution, they are blaming one another and words are spoken that can hurt the person and sometimes their marriage.
3) Automatically thinking because you are married you should merge finances. Not taking into account if one enters the marriage with debt, which can impact the other one’s credit, especially if an emergency happens. There are some people who are not comfortable with one spouse managing all the money. Therefore, couples have to be open and honest with each other about money and the financial baggage they are bringing into the marriage and decide mutually how marital finances will be handled.
[Visit the U.S. News Personal Finance site for more insight and money management tips.]
What's the smartest thing you could do before you get married to prevent problems later?
The smartest thing you could do before getting married to prevent problems later is to disclose your financial background and behavior by putting it all on the table so that no one is surprised later and has regrets (like buyer’s remorse). Financial transparency during the engaged state and being able to solve financial challenges during that time can set the tone for handling any financial challenges later.