Does the following describe your household? When it comes time to pay the bills, reconcile the checkbook, look over the explanation of benefits from your health insurer, call a company about billing matters, change the cable package you receive, write a check to school for your child's lunches, and just about everything else financial, either you or your spouse take on that duty.
According to surveys, if you are married, you don't split the duties with your spouse, and if you're single, you don't ask a friend or family member to help you handle the household finances. In fact, a survey conducted by American Express found that the job of managing the finances normally falls on the men. Seventy-four percent of respondents said that the male spouse handled filing taxes versus 52% of females. Sixty-one percent said that the man pays the credit card bills versus only 22% of women, and 56% said that men apply for loans versus 30% of women.

By the statistics, it appears that men are the household money managers in most families. According to CNN, 43% of people over the age of 18 are single. That's 96 million people who are handling their household finances on their own.

If Something Happens
Especially when we're young, we don't think about what would happen if we were to suddenly pass away or become incapacitated. Sure, it's not something we like to think about, but your chances of being involved in a serious accident are about one in 16. If you were sick or injured, or if you suddenly passed away, have you prepared your spouse to take over the finances? If you're single, who will manage your finances and maybe more importantly, the finances of your children?

Make Some Files
Fortunately, having a backup plan won't take much time to put together, but when you do it make sure to keep identity theft in mind. We're going to put a lot of sensitive information in writing, and we want to split the information into two files. Making two files means that in the event that one file is lost or stolen, a thief would have to have both files to access any of your accounts. Remember, storing a file online in a cloud environment like Dropbox doesn't fully protect you from identity theft. The best way to do that is by going low tech - two files in two locations.

Make a file that contains a numbered list of everybody that you use in your financial life: utilities, credit cards, banks, the school cafeteria, any investments like your 401(k), your home and the cable. If something receives or makes you money, include it on your list and give it a number. Include the mailing address, phone number, the person you deal with and only the user name if you access your account online.

In the other file, identify the company only by the number you used in the first file. You could use the initials of the company in addition to the number, but don't identify the company by name in both files. The second file will contain the account number and your password to the company's website. You could split the files in numerous ways, but make sure that the user name and password are split up as well as the name of the company and your account number.

Give It to Somebody
Next, give the file to somebody outside of your home. If you're married, give a copy of the second file to your spouse, and also a trusted family member or friend. Even better, give it to two people outside of your home so there's little chance of it being lost. You don't want to keep the second file on your computer. If an identity thief got to your computer or cloud client to steel the first file, he or she can easily take the second file. Copy it to a flash drive or CD and send it to those trusted people.

By now, you've instructed your spouse on what to do if something happens and you've instructed those people holding the files how to combine the information. If you're single you'll likely have to include some additional information that somebody who doesn't live with you would need.

The Bottom Line
Remember that during this time there will be a lot of strong emotions causing a spouse or other loved ones to have a much more difficult time making decisions. Not only does this system protect against identity theft, but it also makes important financial decisions more of a committee action so the emotions of the event don't lead to bad decisions. Finally, don't forget to update the files at least once per year.

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