If you are at the point in your marriage where you are considering divorce, you should begin preparing now to put yourself in the best financial situation possible. Here are the five most common financial mistakes we see at the Wildflower Group, along with advice on how to avoid them.
Mistake #1: Handing over the purse strings
By not engaging in the family finances, women set themselves up for potential hardships. Many women who managed their finances perfectly well while they were single fail to stay informed after they get married, which often leads to financial hardship.
Solution: Pay attention to the household finances Both partners should attend the meetings with insurance agents, accountants, financial planners, and lawyers. Women should also look over monthly bank statements and credit card bills. Couples should make a list of all bank and brokerage accounts and insurance policies and keep it with other important documents, such as wills and medical directives.
Mistake #2: Losing your financial identity
Upon getting married, many women close out their old accounts and use joint accounts. Although there is some practicality to this, it may result in you losing your own individual credit rating.
Solution: Maintain some individual accounts
You always want to maintain your own credit identity. It is recommended that couples keep three bank accounts (his, hers and ours) and maintain separate credit cards.
Mistake #3: Walking away from your career
While you might welcome the chance to stay home with your kids, the longer you're out of the work force, the harder it can be to jump back in. Women often face low-ball wages or lower job titles when they try to return to work after a long hiatus.
Solution: Keep your skills fresh
It might be hard to do when you're up to your eyeballs in dirty diapers, but unless you're independently wealthy, you should always be aware that you might someday return to the work force. Kids, after all, do grow up. So, don't lose touch completely. Try to take on consulting projects during your industry's busy season and attend professional networking events. Even charity work can give you a leg up when you start applying for a new job.
Mistake #4: Not saving for retirement
Many married women don't make retirement-saving a priority. If the husband is the primary wage earner, the wife often trusts her spouse to save enough for their collective golden years.
Solution: Penny-pinch now for your future
Make saving for retirement a priority even if it means stashing away less for your children's college education. If you're working, save as much as you can in your company's retirement plan, or in an IRA. If you're not employed, contribute to an individual IRA.
Mistake #5: Asking for the house during a divorce
Women often focus so intently on winning custody of the children or keeping the house that they lose sight of the bigger financial picture. Many fail to look at the entire financial picture, including what their life will be like after the divorce.
Solution: Get financial guidance
When women are going through a divorce, they need to determine which assets will help them pay their bills and reach their long-term goals. Women should consult with a financial planner as well as a real estate professional that specializes in these situations.
Do you have financial questions? Post them on our online divorce support group forum and get advice from other Wildflower Women who have been through the divorce process.