My 93-year-old father always said that “You cannot choose your parents or your siblings, but you can always choose your spouse”. We meet someone, date them, and ultimately choose one person to spend the rest of our lives with. However, in any relationship, things happen – challenging things - that may cause two people to go their separate ways.
For those whose relationships are just starting out, or who are in a committed relationship, we encourage you to sit down with your partner to discuss this important topic. Money is one of the top three leading causes of divorce in the world1, and you may find that you differ in your expectations for spending, saving, and managing money:
- Save or spend?
- Fun first; Pay bills later, or the reverse?
- How do we pay bills?
- Split down the middle, each spouse pays for their assigned billing items?
- Pay bills from a joint bank account?
- Do we contribute to retirement accounts or not?
- Should we buy a home or rent?
- How will we use credit cards?
- Pay in full or just the minimum?
- How do we decide to buy something that we do not have cash to pay for?
There is no right or wrong answer to any of these questions. The key is to communicate your view. Feeling empowered with money begins with accepting who you are, your relationship with money, and finding courage to share that part of you with the person you plan to spend the rest of your life with. In working with women throughout the years, I have learned that a long-lasting marriage usually requires a blend of open communication, intimacy, and empathy.
In working with our female divorcees, we have found that each person's circumstance is unique. Moreover, we have noticed that those who plan well while they are in a relationship were more in control of their finances after the relationship ends. Regardless of who makes the final decision to divorce, you want to be in a place of confidence. Divorced women who feel financially capable are more able use their time and energy to deal with the process of divorce, grieving, and healing.
For those who are experiencing or considering a divorce, we encourage you to take a proactive approach, especially when it comes to dividing assets such as a home.
- If you own a home, speak to a mortgage advisor to understand your options, even if you think you lack enough income to support a mortgage on your own.
- Consider the timeline for certain transactions as some options are not available during an ongoing divorce.
- Avoid making verbal agreements with your spouse that may not be fiscally realistic.
- Understand your income needs.
- Feel free to reach out for connections to professionals within our network to guide you through those financial aspects of a divorce that can be especially complicated.
An in-depth checklist for securing your financial future before or after divorce can be found here: Checklist: Divorce
When I was a child, I heard my mom jokingly say to my dad, "My money is my money. Your money is my money. Are you with me?" Although this message is a bit tongue-in-cheek, it has stuck with me and has guided me to be in charge of my finances. She worked all her life and was a good saver. She sent both children to college outside of the country. She retired at age 58. Although she is still happily married to my dad, going 61 years strong, she would have been financially okay if her marriage did not work out. My mom has proven to be in control of her money in both bad times and good times. If someone you know is experiencing or preparing for a divorce, please feel free to connect them with our firm.