Financial Tables For One

Whether fresh out of college or after a marriage, it is highly likely women will some day go it alone in taking care of their financial needs.

With the combination of later marriage, divorce, widowhood and longevity, almost 90 percent of women will end up managing their finances alone at some point in their lives, according to the Department of Labor.

Regardless of upbringing, income, marital or motherhood status, women need a strong base of financial knowledge to prepare them for that responsibility.  Because the large majority of women will be on their own financially at some time in their lives, financial education is never wasted.  Knowledge gives women confidence that if confronted with being single, they can handle it.

For women who have little or no experience in managing money, taking small steps can prevent feeling overwhelmed. Attending seminars or workshops, reading websites, magazines and books about financial topics or taking a community college course can provide a great foundation.  Professional financial advisors (Certified divorce financial analysts for divorce, CDFA™) can help as well.  As the saying goes, there’s no such thing as a stupid question.  Women shouldn’t be intimidated.  Most professionals welcome the opportunity to share their knowledge and educate clients.

For young women starting out on their own, living expenses and paying down debt like vehicle or college loans usually get priority treatment.  However, it’s easier to save and invest before adding larger debt – like a house – or having children.  Every woman should develop and stick to a budget that allows them to build an emergency savings account equal to at least three months’ expenses, preferably six.  Employer-sponsored retirement plans provide a fairly painless method – pretax payroll deduction – to get started, and women should strive to contribute at least as much as their employer will match.  Enrolling at the time of hire means never missing the money from the paycheck.

Having a team of advisors – a financial advisor, CDFA, accountant, attorney and insurance professional – can help women through difficult times when emotions may cloud financial judgment.  It can also make women less susceptible to scams and opportunists who target the newly divorced or widowed.  Married women don’t necessarily need a team of advisors separate from their husband’s, but they should have met those advisors and be comfortable with them.  A crisis like divorce or death is not the time to be looking for a credible professional.

In addition to basic financial knowledge, married women should maintain at least a big picture view of their finances, even if their husband handles bills and investments.  Reviewing monthly statements and attending annual account review meetings can help provide a basic understanding of the couple’s overall financial situation.  Even if they don’t work outside the home, pay the bills or make the investment decisions, women should know how much money comes into the household and what specifically goes toward bills, college funds, retirement accounts, savings etc. on a monthly and annual basis.  They should also know where key financial documents, such as wills and insurance policies, are kept.

While many financial professionals counsel widows to wait a year before making major decisions such as selling a home, a divorce typically requires quicker decisions, often in conjunction with an adversarial spouse.  Most immediately, couples must decide who, if anyone, stays in the home and how its value will be split.  Women often jump at the chance to keep the house because they have children or it helps them feel more grounded in a time of chaos.

Women should understand that keeping the house means keeping all the financial obligations that go with it – the mortgage payment, insurance, property taxes, utilities and upkeep.  On top of that, they may have to buy out their husband’s share in the property.  Suddenly a $2,000 mortgage payment becomes a $4,000 mortgage payment, which she shoulders on her own salary.  That’s when the CDFA becomes important in helping the client make decisions based on financial reality not emotional reaction, because when the decree is final, you can’t claim ignorance.

A solid understanding of financial basics and the household’s financial picture, along with a team of trusted advisors, can give women the confidence they need to make financial decisions throughout their lives, whether single and childless, married with or without children, divorced or widowed.  Women owe it to themselves to learn basic money management skills and find the professional assistance they need to make sound financial decisions.  It’s a skill they will almost certainly need in their lifetime and it is not hard to learn, so it’s never too early to start.
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Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood.  Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage.  She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”