Do you sign financial documents you have no idea about, do you have a joint account, or are you just a signatory? What happens if you are widowed or divorced? In the second part of the Herald's Women and Money series, Jane Phare looks at the practical side of finance and asks experts for their best advice.
It seems to me that women, in fact everyone, can't know enough about money.
Too many trust their partner, or someone else, to deal with money. And they're ignorant about how it all works – the family finances, mortgages, what they're signing, family trusts, who owns what, wills, internet banking and property ownership.
A colleague of mine, in this case a man, recently lost his wife and when her will was read he discovered she had changed her share of their properties to "Tenancy in common" rather than "joint tenancy."
She'd left her half of the property to their adult sons and daughter, leaving him without control of the properties.
Another friend discovered, after the marriage ended, that a complex series of trusts and transferred shareholding meant she faced a legal battle to claim a share of a successful family business.
Making sure you look after your own money was a key message Heather McRae, principal of Diocesan School for Girls, delivered at the Year 13 leavers' dinner earlier this month. Take responsibility for it, she told them.
It's a message she'll keep repeating to the young women under her care, one that she hopes will give them independence no matter what the state of their future relationships.
McRae is aware there are women who are reluctant to leave unhappy or even violent relationships because they have no financial support. "That crosses all socio-economic sectors."
Financial independence is an issue she's passionate about after learning the hard way when her first marriage broke down. She came off second best and when she married again she took charge of her finances.
Now, she and her second husband John keep separate bank accounts and have their own family trusts.
Pink tax adds costs
She points out that women are on the back foot financially for several reasons, including "the pink tax". By that she means the extra money women spend because of societal expectations and pressures - money on their hair, their nails, makeup, stockings, and shoes and clothes that are often more expensive then men's.
And she notices the lack of chequebook power that "old girls" have when approached for donations to major school projects. The women know their husbands have donated thousands to their old schools but they don't feel they donate to Diocesan.
"There are all these subtle inequities that are in our system," McRae points out.
Her message is echoed by other women spoken to for this series. Knowledge about money is the key. Keeping control of it is equally important.
Here's what the experts say.
Pearl Butler, director Gellert Ivanson
In her time running a St Heliers legal practice, Pearl Butler has seen plenty of women disadvantaged because they have not understood the family finances.
Older women are particularly vulnerable if they suddenly find themselves widowed or divorced. They may not know how to internet bank or pay bills and often have no idea about the state of their financial affairs.
Find out about the bank accounts
Make sure you not only know the passwords to bank accounts but that you know how to access them online, Butler says. Keep an eye on the accounts and, if possible, keep a separate account. It's never too late to learn, she says. Start now.
Ask questions, even the uncomfortable ones
If you think something's not right, don't be afraid to ask questions even if it leads to some heated discussion. Women often don't see problems coming as long as the money is coming in for groceries, Butler says.
"We're not good at asking questions, but ask them anyway before it's too late. "
Butler has seen cases where women are left disadvantaged, without money and unable to pay legal bills if the marital property is in dispute. And it's not unusual for one partner, usually the woman, to blindly follow along while the man runs the business, and associated finances.
Get independent legal advice
This one's a must, Butler says, particularly when it comes to personal guarantees, the home being used as security, the formation of a trust that may have financial implications, or when "confronted with a pile of paperwork to sign".
Butler says people are reluctant to get a second opinion and women are particularly reluctant, even when Butler insists. They trust their partner, they tell her.
Know what you're signing
See above about getting independent legal advice.
It's better to ask questions at the beginning than to be faced with financial disaster, or be faced with a long expensive legal battle to claim half of what is rightfully yours in the case of divorce.
"It's seen as untrustworthy or confronting (to ask questions)," Butler says. "The man will say 'just sign here, don't you trust me?' Rather than cause an argument or be seen to be distrustful they will just sign."
Find out about the will
Know what each other's will says so there are no nasty shocks, Butler advises. It's possible for one person to change the ownership arrangement of a property without informing the other.
Keep a separate account
If at all possible, keep a separate account that no one else has access to. Make sure you have your own cash flow card and know how to access money.
Think carefully about an enduring power of attorney
Men and women often appoint their spouse or partner as enduring power of attorney to manage their affairs if they become incapacitated. That's fine in most cases, Butler says.
But there's always the risk that a partner could be tempted to use money for their own purposes, or to benefit someone else. Consider an option whereby your attorney must provide information to another person, such as a trusted lawyer, accountant or children.
"It does help to ensure there is a level of accountability."
Know when to trust a trust
Trusts can be complex so make sure you know how they work. Seek expert advice and don't be afraid to ask questions.
"If you have reservations," Butler says, "my advice is don't rush in until you are totally comfortable and know what you are doing."
It's not uncommon for a woman to find herself on her own and not know what the assets are or where they are. Spouses can have assets "tucked away," Butler says.
Don't stick your head in the sand
If you know, or think, something is wrong with the family finances, find out what's going on. If necessary, ask for professional advice.
"I've seen women in trouble and they just pretend it's not happening," Butler says. "They think it's their partner's problem to sort out. Sometimes if they had asked questions earlier it might have been able to be resolved."
Paula Steed, chief internal auditor, ASB
Paula Steed agrees that even if the household division of labour means one person deals with the money side of things, the other needs to know what's going on.
"It's important that you understand your family's financial situation, how to access the information and that you are making the decisions together even if another person is actually doing the transaction," Steed says.
Find out how your accounts are set up
Make sure you understand the various joint and individual accounts you have with your partner, and that you have access to the relevant ones, as you may not have access to accounts that are in your partner's name.
In that case, if your partner dies, the bank will freeze the account and associated credit card. That means you could have difficulty accessing money until the estate is sorted out.
Don't be afraid to ask
Women who don't know about internet and digital banking can get a lesson from specialised staff at a local branch, Steed says.
"People shouldn't be afraid to ask. Knowledge is power and that's what try and equip people with."
Help your children to be money wise
Banking programmes like the ASB's Get Wise programme, aimed at primary and intermediate school children, will help create "cash-clever kids".
"When kids are exposed to that sort of thing earlier on they have greater awareness of money and how to manage it. I think it's really important for young women to learn about money and feel confident about making decisions."
Manage your own money
Steed was taught to always look after her own money by her parents, a lesson in "how to prepare for what you don't know is coming" as she calls it.
As a result she always had her own bank account growing up, and kept it separate during her marriage to her ex-husband.
If you think you're in trouble, ask for help
If things aren't going well financially, the worst thing you can do is ignore the situation, Steed says. Talk to your bank or a financial adviser, or get some independent financial advice, she says.
Think about investments
The bank will help with investment advice plus online tools like Wealth Central, available to anyone, that help to track investment and savings, and provide information on other investment opportunities, including property and shares.
Rev Sandy Robertson, chaplain at Diocesan School for Girls in Auckland
Not getting the financials sorted before entering into a permanent relationship can be a "deal breaker," Diocesan chaplain Sandy Robertson says.
Many of the school's former pupils return years later wanting to be married to the love-of-their-lives in the chapel. Robertson always made sure they have talked about money, giving them a series of questions to answer: how would they organise their money, who would be responsible for bills, what amount did each of them thing was fine to spend on an item without consulting the other?
Robertson has been divorced herself so she knows how relationships can go wrong. She was young and still studying. Because she wasn't the main earner she felt bad about taking her fair share out of the relationship.
Talk about money before entering a permanent relationship
"It needs to be talked about before you get married, not after," Robertson says. "Women need to really take care of themselves in that sense."
People are reluctant to raise the awkward subject of money in the early stages of their relationship, exactly the time it should be discussed.
Plan ahead, learn about the family finances
Robertson has encountered many older women whose husbands have died and they have no idea how to handle their finances because they've never had to deal with it.
"I don't think it's ever good for the other person not to know what's going on."
Control your own money
Robertson would like to see all young women make their own decisions about how to spend, save or invest money.
"If they decide to do the joint account situation then they need to make that decision with their eyes wide open."
THE FINANCIAL COLUMNIST/ AUTHOR
Having written a personal finance column for the Herald for years, Mary Holm is all too aware that many women find the subject too hard or too boring, or are reluctant to become involved.
It was with this in mind that she wrote her latest book, Rich Enough? A Laid-back Guide for Every Kiwi. She's dedicated a section to the difference between the way men and women invest. Women tend to be more risk-averse.
"That's a good and bad thing," she says. The downside is that women can miss out on higher returns.
She's heartened by signs of change including personal finance being taught in schools, and young women being raised to know they are just as capable as their brothers.
Have a go at investing
Don't be afraid to go into riskier investment if you're not planning to spend the money within 10 years either on a first home or retirement. Don't panic when the balance goes down because it will. It always comes up again.
Don't abdicate responsibility
Women are more likely to abdicate responsibility for money to a partner, an arrangement that can be "terribly disempowering" and leave them without basic skills, Holm says.
"If one partner has to ask the other for money or doesn't understand their financial investments they can't really operate as equals, " Holm says. "Power and money are so linked."
Don't be afraid to speak up
Holm remembers running a series of personal finance seminars in various parts of the country and most of the questions coming from men in the audience. Women were afraid they would look silly if they asked, she says.
"There's no such thing as a dumb question about money."
• Do you have a question? Email it to email@example.com and she will try to answer it in her column in next Saturday's Business Herald.
Lorraine Pound, principal of Epsom Girls' Grammar School
In charge of the welfare of 2200 teenaged women, Lorraine Pound says it's important to work against stereotypes that suggest girls don't need to know about money and finance.
"Of course they do."
To that end, the school makes sure that "financial literacy" is woven into the core curriculum. Year 9 and 10 students can opt to take business studies, and take more advanced courses in year 12 and 13.
In addition the school's careers department runs lunchtime talks on financial literacy and the Year 13 students take part in Unicorns and Vacuum Cleaners, a workshop that prepares girls for the outside world. The unicorn represents the "big dream" or aspiration; the vacuum cleaner represents the practicalities, how to make it happen.
Learn about banking and finance
It is important for young women to grow up learning about and understanding money, including budgeting and personal finance, so they are equipped to navigate all things financial, Pound says.
That includes knowing how banking systems work, how compounding interest works, mortgages, rental agreements, and the legal requirements linked with finance.
Don't do what grandma did
"It's absolutely vital that nobody abdicates knowledge and understanding and responsibly for money to another person," Pound says.
She thinks the younger generation of women won't do this to the same extent that their mothers and grandmothers might have. Instead she's heartened to see more couples "tag teaming" in the organisation of their lives, including children and finances.
Learn about finance and investing
Pound thinks women have the skills needed to manage finances but older women were simply never taught. "The very fact that financial advisers hold women-only sessions to learn about investing in the stock market means there is a need to teach women to have the confidence to do so."
THE BANKING OMBUDSMAN
Nicola Sladden, Banking Ombudsman
Nicola Sladden wants see women put as much effort into their "financial health" as they do to physical and mental health. In her role she sees first-hand what can go wrong.
"It is absolutely crucial. Women have a whole raft of challenges when it comes to money because as a woman you will probably live longer than a man, you'll probably earn less than a man and you're more likely to have time out of the paid workforce."
Check your bank accounts
Women in a relationship should check the structure of their bank accounts and know what the rules are if there is a separation.
"It is common for bank customers to think they should know about their finances and to feel too embarrassed to ask questions. But no one automatically knows this stuff. We learn it from our families, our friend and by finding things out for ourselves."
She points to free resources, including guides on the bankomb.org.nz website.
Don't leave major financial decisions to your partner
Leaving financial decisions up to your partner can put women at risk financially particularly if they divorce, Sladden says.
"On the other hand if couples work together on long-term money goals, the outlook is significantly improved. Both parties should make sure they have a say in financial decisions."
Know what's going on
Sladden sees cases of women who have been widowed or divorced and are unaware of their liabilities or how their finances are organised.
"Life events can have a huge impact on your finances," she says. "We get cases where a woman is taken by surprise that a male partner has taken out significant lending against their home property to prop up a business which ultimately may fail. They're left with significant debt that they weren't aware of."
Keep your own account
It's not uncommon for joint accounts to be frozen when a relationship breaks down and there is a dispute, or one partner has accessed the account to the disadvantage of the other.
It's wise to consider spreading your money across a variety of accounts, including a separate account.
Learn modern methods of banking
Sladden strongly encourages all women to learn skills like internet banking which could be useful if a woman is no longer able to visit a bank or a local branch closes.
She predicts banking will become more complex as technology develops. Understanding banking should be a priority, she says.
Stay involved in the financial relationship
Don't take a step back and let one partner be in the driver's seat regarding finances, Sladden says. "While that might be okay while the going is good, it doesn't prepare you for rainy days."
Tomorrow in the Business Herald and online at nzherald.co.nz: The third part of our Women and Money series looks at why more women don't make it to the Rich List, what needs to change and why they should give business a go.