Monday, July 28, 2008

More Resolution!

I am one of the world's crappest personal financial managers. And I have resolved to do something about it. No need to wait for New Year to make a resolution - why not just do so today?

It spawned from that crazy night-mare that I had where I dreamed my husband had died. It occurs to me that if I had to administer his affairs I would not know where to start. I don't know how much he earns. I don’t know where his/our joint investments are, I cannot remember how much of our mortgage we've paid off, and how many years left we have to service.

I don't know how much my life is insured for, except that it supposed 36 times my salary. But that's only useful if you know what my salary is, and I think I must be the ONLY person in this universe that has no idea what her exact salary is, I sort of remember roughly, but not exactly. And I cannot tell you what my last bonus was without having to go through the papers stuffed in a drawer somewhere. I cannot remember what shares are in my portfolio, I can't remember how much income tax I've paid this or last year (since it's all deducted at source anyway!), I have no clue how much bills are on my credit card - my husband takes care of all this and more.

My financial focus is only on our domestic life, since all my salary is in RMB, and cannot be freely converted, so I pay everything in our household - the nanny's salary, our driver, the food bills, water, electricity, clothes, Sophie's school and activities, and just our general daily consumption.

It's appalling, and I am really embarressed about this. Most of my financial manager friends would be aghast, and wonder how can I handle large amounts of my clients money and yet have no clue about my own personal fiscal balance sheet. The argument that I have the utmost faith in my husband and his judgement is just not going to be useful if he were one day to just disappear.

Fabien calls it the irresponsibility of the over-privileged. His theory is that I never even dreamt of a possibility that I might one day lack cash, and therefore I dump things into my shopping basket without even scrutinizing the prices. This is in reference to the day that I bought a box of foie gras thinking that it had one zero less than it actually did on the price tag!!

I defend myself on the basis that I am completely unmaterialistic person, and it is true that most of my friends would say that I usually give generously without ever looking at the cost.

Although when I think about it, I have to grudgingly admit that he is right. There is no inherent conflict between being generous and being financially aware. In fact, only the financially aware can be truly generous because they know the value of what they are giving, as opposed to someone who is just absolutely clueless about it all.

So I am going on this bout of taking out my excel spreadsheets and looking at our consumption patterns and savings right now. I should do this exercise regularly, together with our conversations about the future and where in the world we intend to live and for our children to go to school, and for us to grow old together. It's all in abstract if one does not have the financial basis for these decisions.

Thankfully, my loving husband is ever patient and ready to start explaining all this to me. Starting over dinner tonight.


mini said...

I am too, you are not alone. I hate to admit but I don't really budget, don't balance my check book. I shouldn't list too many lest I scare anyone who reads this :P

I am planning to be more responsible however! Been meaning to try (money management tool) for a while and start investing.

PS. Thanks offering your home in Beijing! That's very sweet!! :)

Paula said...

I got into some financial difficulty with my credit cards in the past. It caused some rifts in the relationshp with my husband but we came through it and decided to consolidate the debts into one loan. We checked out several price comparison websites such as eComparison to see which lender offered the best deal for us. I still have one credit card but my husband keeps it in his wallet so that I don't get tempted.