Women And Divorce – What They Must Know (4min read)

June 14, 2016 Facebook Twitter LinkedIn Google+ June News

According to the Centers for Disease Control and Prevention’s National Vital Statistics System, 38 percent of those married in 2014 are already divorced. While divorce is hard on all involved, studies show that, statistically, women come out of divorce worse off than men. This is especially true when looking at finances.

SUM180 is a financial planning service designed for women. According to Carla Dearing, the company’s CEO, “Studies reveal that in the first year after divorce, the wife’s standard of living may drop almost 27 percent, while the husband’s may increase by as much as 10 percent.”

Dearing notes that most women are more emotional in life, and they are even more so when it comes to divorce. As a result, they often rush into divorce, just wanting to get it over with. This leads to settlements that are not based upon what is best, but what is expedient. While many people try to go through divorce alone because of its personal nature, this only keeps them from good advice and valuable emotional outlets. Let a good friend or therapist in on your divorce and get your emotions out. This way, when you meet with the attorneys, you have a clear head.

In this two-part series, we’re going to look at what Dearing says are common pitfalls women fall into when divorcing, and her tips on how to avoid them.

Pitfall: Letting your emotions determine your path. Money is always emotional, but divorce amplifies this reality many times over. Do not, for example, be overly anxious to get closure. Rushing into a divorce settlement because you “just want to get it over with” can spell the difference between a secure retirement and a strained one.

What to do: Reach out to a trusted friend for advice. A friend or family member with your best interests at heart can lend you the clarity and energy for the next steps you need to tackle. Share a glass of wine, talk, cry, and accept the support you need. If your friend has been through a divorce herself, she may even recommend a great divorce attorney or divorce financial planner. If so, listen up.

Pitfall: Failing to understand your financial picture. Some women get into the habit of letting their spouses handle the family finances, or of compartmentalizing the family finances so that while you may be expert in one area (e.g., your household accounts), you are out of the loop in others (e.g., a family business). You can’t arrive at a fair settlement if you don’t have a clear and comprehensive picture of your financial situation.

What to do: Start getting up to speed on your financial picture right away. First, make sure you have access to all bank and investment account passwords and documents, and your recent tax returns. Check your credit reports for discrepancies. This may feel overwhelming at first. Fortunately, educating yourself about your finances doesn’t have to be something you tackle alone. Once you have gathered all your financial statements, your financial planner can help you organize and interpret this critical data.

Just remember that the financial implications of your emotional decisions may be with you for decades. By taking the time to slow down and work out your emotions prior to the divorce proceedings, you can logically process information and make sound decisions based off of good financial data and not the desire to get things over with.