Why you need a household money ‘bible’ to guide your family through tough decisions

You know how when you go and stay in an Airbnb or rental property, the best ones have a folder with information on how to use the remote (when did turning on the TV get so complicated?), who to call if there’s a power cut, and other household need-to-knows?

Well, do you have this for your household – in terms of money?

Many people have information only they have access to that would leave their partner high and dry if said partner needed to know anything about managing the household finances, from what bills are paid and what bank accounts to use, to how to literally keep the lights on.

If something happened to you, would the person or people you live with – or don’t live with, but who are closest to you – know how to keep the household running? Similarly, if you’re the breadwinner and self-employed, if something happened to you, would your loved ones know how to keep the source of the household income going?

One of my money-coaching clients has been pulling together her financial information to work out her net worth. It’s been easy enough for her to do, as she manages the family finances.

But it’s made her reflect on how likely it is her husband would be able to do the same. It’s reminded her to prioritise creating a “guide to running the household finances 101” document to share with her husband – a money “bible”, if you like.

What do you want to include?

Think bank accounts, bills, savings accounts, insurance documents, credit cards and loans, investments, pensions, wills. You can share passwords for online accounts with a partner securely using a password manager. The National Cyber Security Centre has information on this.

Then, decide what information your designated person would need to know. This can be as straightforward as: these are the bank accounts I/we have and this is what I/we use each account for.

Where will your household money bible be located?

Physical, digital or both? Whatever you decide, you’ll want a system that allows you to create folders and name those folders. This makes it easy to know where to put things and where to find them. Make sure it can be found easily. You might decide on a lever arch file for your physical paperwork and a series of folders saved to your computer or Google Drive or a similar service for your digital paperwork.

One friend has her and her husband’s household money bible on a spreadsheet they both have access to. When I lived with a friend, we had a physical folder for our household bills. She was responsible for council tax, energy and water, while I managed our TV and broadband services. This helped us share the burden of managing the household bills and we were responsible for updating the physical folder with relevant information.

Who needs to know about it?

If something happened to you and someone else needed to keep the household running, who would that person be? This may be your partner, parents, siblings, adult children, other family members, friends. Then, when you’ve created your household money bible, make sure to tell this person about it.

Communication is key. In fact, if you tell your designated person before creating your household money bible, they have some helpful pointers on what needs to be included for them to comfortably take over the reins in your absence.

Set it – but don’t forget it

Your household money bible will need updating. Decide how often. Annually is a good place to start. If you have a system in place already, the start of the year is a good time for an annual tidy.

Creating a household money bible, as with writing a will, is about taking steps now, before a crisis arrives, to get your information together, in one place and share it with your partner or designated person. Doing this work saves your loved ones the worst sort of life admin.

Different households work differently so figure out what works for you. I know that all of my money-coaching clients want arrangements to put them at ease. It’s a future-proofing activity that will give you and your loved ones peace of mind. Merry Christmas!

Talia Loderick is a money coach (talialoderick.co.uk)