Divorce and Your Finances- Use These 4 Tips Now

Divorce can be difficult both emotionally and financially. Unfortunately, women often fare worse financially after a divorce than men do for several reasons:

Men frequently out earn women.

In marriages where both the husband and wife are employed, there is often a disparity in income favoring the man. As a result, post-divorce, many women lose more than half of the household income.

Women are often the primary caretakers for children and aging parents.

Because of these responsibilities, women may have taken extended time off work, or have never worked at all, further complicating the financial situation. This is a very noble and gracious course to take, but too many of us have been surprised by divorce, and we need to take steps to protect ourselves financially.

Additional issues for women who have taken time of work to raise a family.

Women who have taken time off work may have to deal with the bias against resume gaps and they may also have to accept lower salaries due to less professional experience because they haven't advanced as far in their careers. After a long absence from the job market, women may have to learn new skills or embark on a new career altogether. Lifetime earnings, and therefore retirement savings and future Social Security benefits, will be lower as a result.

If you are facing these issues, it's important to get legal and financial advice.

1. Although a do-it-yourself divorce may be tempting to avoid attorney fees, be cautious. If you and your spouse agree on how to divide up all assets, child custody, child support, and spousal support, a DIY divorce may make sense. If you are not in complete agreement on all these issues, and attorney's fees are out of the question, consider hiring a divorce mediator. If you think there is a possibility that your spouse is hiding assets, consider hiring a forensic accountant to track everything down.

2. You should remember to negotiate for retirement assets. While this may seem like a less pressing concern than where you are going to live or who will take care of the kids, making sure you get your fair share of the retirement assets will really pay off later. And whatever retirement assets you receive, please don't be tempted to cash them out and use them for current expenses!

3. Negotiate for a life insurance policy. He supported you and the family for years. What happens if his ability to pay child and/or spousal support goes away due to an untimely death? Protect yourself and your family by having a life insurance policy in place to protect you until the children are grown and you are able to support yourself.

4. Set financial goals. One of your first financial goals should be to create an emergency fund to help you handle unexpected expenses without going into debt. Also, save for retirement over saving for your children to attend college. They can get financial aid loans; you can't. Contribute whatever you can to your retirement savings - even if it's only $25/mo. It keeps you in the habit and you can easily increase your contributions later as you get back on your feet.

Divorce is financially tough for both women and men; proper financial planning during and after the process can make it easier to move on.

Provided by Diana Jansen, Financial Advisor, High Point Financial Group, LLC

Cell: (303) 478-3189

Office: (303) 531-8855

Let's Talk

Joan Rogliano

Wildflower Group, LLC

(303) 667-5485

4 West Dry Creek Circle, Suite 100

Littleton, Colorado 80120

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