“When there is no money coming in the door, love goes out the window”. A sage aphorism often recited by wise parents as they watch their offspring play the dating game. “No way” we say, love conquers all”. As we grow up we soon get tired of funding our boyfriends when they are between jobs or our girlfriends shopping sprees, and decide that our parents are pretty smart after all.
The facts about divorce aren’t pretty. Two in three marriages today end up in the divorce courts and 50% of the couples cite finances as the leading cause of dissension
It’s usually the wife who loses the most financially, but not always. There have been cases where women have left their husbands with nothing but their undies and toothbrush.
When a couple splits, a woman’s standard of living generally plummets 30 percent in the first year after a divorce, while the husband’s rises 10 percent or more. Alimony is now a relic of the past. Fewer than 15 percent of divorced women are awarded it, and of those, 34 percent never receive a penny of what’s due them.
Ladies, take these measures to protect yourself.
• If you decide to totally give up your career when you get married you are taking a big risk. Taking a few years off while your children are very young is acceptable but staying out of the job market for 15 to 20 years can be a financial mistake you may never recover from. Getting a job in a competitive market is hard for even highly qualified individuals. Trying to find a job after staying at home for 20 years is virtually impossible.
• Try to get a part time job or work from home to keep your skills sharp and up to date. Scores of women are trapped in bad or abusive relationships because they have no way of supporting themselves.
• Start a savings plan as soon as you get a job and keep it separate from your partners retirement fund, even after marriage. Not only will it give you financial security, but your husband will appreciate the fact that he does not have bear the entire burden of funding the retirement coffers.
• Make sure your name is listed on all joint investments. And be sure you have at least one credit card in your own name. This will establish your own creditworthiness, which is essential if things go awry
• Build a good credit history by paying off your credit card every month.
• Open a bank account in your own name
• If your husband is a business owner make sure that you do not sign surety for the company debt. If his business goes South, you could be paying the bills long after he has flown the coup.
• If you do get divorced, claim your part of the retirement benefits. Recent legislation has made it easier for a woman to claim half of the family’s retirement funds.
• Don’t turn your nose up at this because the paperwork is messy. This can mean the difference between comfort and poverty in your old age.
• Divorcing women often choose the house or up-front cash over their soon-to-be ex’s pension. That can be a big mistake. Over time, that pension can be substantial.
• Close all joint accounts, he may take his new love interest on a cruise, at your expense.
• Once you have your own credit in place, inform any joint-credit-card companies in writing that you are separated and will not be responsible for any new charges. The balance, however, must be paid off before creditors will close the account.
• Close your joint bank accounts. In some cases you may need to keep a joint account open to pay for household expenses until the divorce is final. In that case, ask the bank to impose a two- signature requirement on the cheques. That way both you and your spouse must sign before any transaction can be made.
• Joint brokerage accounts fall into the same category. Write at once and notify the broker that you are separated, and ask that the broker not make any transactions without your approval.
Divorce is a highly emotional event so try and stay away from life changing decisions until the dust has settled. Don’t do anything rash like buying a new house or car.. If you have a cash settlement seek the advice from an independent professional advisor. It’s best to let your head clear for a few months before you plunge into any big-ticket money investments or purchases. The circumstances change somewhat when you get married because you have to agree on what you want to achieve as a couple. Your expenses will increase because you may want to buy a home and perhaps have children. In addition, things like life assurance, disability coverage and a good investment plan become necessary.