When women fall in love, they often hand the purse strings over to their
husbands. As a divorce attorney, it is the single biggest mistake I see
women make. Once a woman gives all the financial decision making power
to her husband, she puts herself in a very vulnerable position. Especially
when the marriage ends!
This isn’t purely a women’s issue, of course. Men can just
as easily fall into the same traps. But women are more likely to give
up careers to raise children, and are more likely to outlive their husbands.
Here are some common financial mistakes married women make — along
with some advice on how to avoid them.
1. Handing Over the Purse Strings
By not engaging in the family finances, women set themselves up for potential
financial hardships. Financial ignorance is not bliss. I have clients
who handled their finances just fine when they were single. When they
married they handed all their financial power over to their husbands only
to later find themselves divorcing and in trouble with the IRS and creditors.
Their husbands had gambling habits, debts and problems with the IRS. In
some cases, women have had to file for bankruptcy.
My advice? Be an equal partner in all the financial decisions. Be part
of the process. Look over the monthly bills, bank statements, credit card
bills and ask questions. Be familiar with the family’s overall financial
picture. Know where accounts are held; interact with the accountant, financial
planner and attorneys handling financial matters. If he knows, so should
you. Don’t shy away from being in charge of your financial destiny.
2. Losing Your Financial Identity
Maintain your own credit card. When women get married and give up their
own credit cards to be just an authorized user of their husband’s
card, they don’t realize that it is difficult to later secure a
credit card on their own. In a situation like this a woman’s lack
of active credit card history can work against her. If divorcing, it could
take a good six months to secure a credit card in your name and you will
be offered only high-rate credit cards with small lines of credit. Credit
bureaus won’t calculate a FICO score (the most common credit score
used) for individuals whose credit history has been inactive for six months
or longer.
My advice? Keep your own credit card. You have a credit history and hopefully
good credit scores. Don’t give that away! Keep separate credit card
accounts and set-up three separate bank accounts: yours, his and ours.
3. Walking Away From Your Career
While you might welcome the chance to stay home with your children, the
longer you’re out of the work force, the harder it can be to jump
back in. Women often face lower wages or lower job titles when they try
to return to work after a long hiatus. Think long and hard about giving
everything up.
My Advice? Work part-time just to keep yourself in the work force. Keep
your skills fresh. And remember, you may return to the work force for
one reason or another. Divorce, unfortunately can be a possibility and
children eventually do grow up! So don’t lose touch completely.
Take some consulting projects, do some charity work, be part of some professional
networking organizations. This will help you maintain your career identity.
4. Not Saving for Retirement
Some married women don’t feel it is necessary to save for retirement.
Married women tend to rely on their husbands since they are the breadwinners
and women expect to be provided for during their golden years. This is
not often the case.
My advice? Start saving Now! Make it a priority. Start pinching your pennies,
if necessary.