Editor’s note: This is a transcript of the audio file.
What happens when a wife who hasn’t been very involved in a couple’s finances is widowed?
Hearsay and random factoids may suggest that widowed women don’t do well managing money after their husband’s death.
I’m janet stauble with your bankrate.com Personal Finance Minute.
Economist Joanne Hsu, who did her thesis research for the Cognitive Economics Survey at the University of Michigan, found that widowed women cope differently based on their situations.
Eighty percent of wives who are part of a traditional couple learn more about money and take more control of it when their husband’s health falters. When they’re ultimately left on their own, these wives are likely to be successful managing money in retirement.
The widows who don’t successfully manage their money are those whose husbands died unexpectedly, leaving them no time to learn, or those who were left with a financial mess because the husband was a poor money manager himself.
The obvious lessons from the findings are that both halves of a couple should be involved in financial decisions. Even if one of them is the primary money manager, the other should learn about their situation and get familiar with the day-to-day budgeting and banking process.
To learn more about money management, visit Bankrate.com. I’m Janet Stauble.