Couples today are more likely to evenly share the responsibility of household finances, says recent research by LIMRA. The research revealed that for young couples, there is no dominant family financial officer, with 36 per cent of these couples sharing financial responsibilities.
LIMRA’s survey was first conducted in 1965, and again in 1995, aiming to find the family financial officer (FFO). Financial responsibilities households are faced with include keeping the budget, tracking expenses, and paying the bills. If one person takes care of two out of the three responsibilities, the person is the FFO. The study found today’s couples are more likely to share bill paying duties – 42 per today cent versus just three per cent in 1965.
These changes can be explained by the higher number of educated women as well as the fact that there are more women in the work place. The study shows when wives out-earn their husbands, they are 38 per cent more likely to be the FFO, while this number reaches only 13 per cent when men earn more than their wives. When the incomes are similar, usually, women are the FFOs, or they share responsibilities.
More concerned about financial planning issues
LIMRA suggests that it is helpful for advisors to understand the FFO concept, since those in charge of household finances are generally the most concerned by financial planning issues. “On average, FFOs are 32 percent more likely to be extremely concerned about financial worries, including saving for retirement, and maintaining a current living standard should a wage earner become disabled or die,” says LIMRA.
However, the LIMRA study also indicates that 60 per cent of couples do not strongly agree on their financial goals, so it is important to engage both spouses in the financial planning process, whether or not there is a FFO.
The FFO findings are based on 2016 survey of 1,043 households with respondents aged 25-44, who are married/partnered. To learn more, LIMRA members can read, Identifying the Younger Decision Maker: Evolution of the Family Financial Officer.