Pitfalls to Avoid in Marriage to Make Divorce Easier

A couple gets married and as is often the case, one person is better with numbers and finances, so the other spouse acquiesces the financial decision making to their more fiscal savvy partner.  Men and women both fall into this scenario, however; women are more likely to give up their careers to raise children and are more likely to out live their husbands.

Below are some common pitfalls married women fall into and some advise for avoiding these traps.

1. Pay attention to the household finances

Know about your family finances, income streams, real and personal property, taxes and insurance. Go with your spouse to the accountant and make sure you actually read the tax returns before signing them.  If there is something on the tax return that you do not understand ask the accountant to explain it to you.  Make copies of all financial statements or save them to a computer’s hard drive or on a flash drive.  Make sure you know all the user names and passwords for accounts at banking institutions where either you, your spouse or both of you have accounts.

2. Don’t lose your financial identity

Make sure you continue to build and maintain credit after you get married.  It is tempting to merge all your separate accounts into joint accounts.  However, down the road you are likely to discover that your inactive credit history equates to only high interest rate offers.  I recommend that couples have three bank accounts (his, hers, yours) and maintain separate credit cards.  If couples feel comfortable I would also recommend sharing your bank and credit card statements with your spouse so that there is complete transparency about the finances.

3. Walking Away from your career

According to the US Census Report, 23 percent of married-couple family groups with children under 15 had a stay-at-home mother.  According to the latest Census Report, the United States has an estimated 5.3 million “stay-at-home” parents: 5.1 million mothers and 158,000 fathers.

The longer you are out of the workforce, the harder it can be to jump back in.  Keep your skills fresh.  Unless you are independently wealthy, you should always be aware that one day you might return to the workforce, like when your children are grown.  So, stay in the career loop.  Try to take on consulting projects during your industry’s busy season, work part-time while your children are in school and attend professional events.  Maintain any certifications, licenses or professional degrees, which might require yearly dues and/or a requirement of continuing learning credits.

4. Not Saving for Retirement

People, especially young people, do not make saving for retirement a priority.  Adding to this problem, women are more likely than men to spend what little savings they have on something other than retirement.  Make saving for retirement a priority.  Find out if your employer has a 401k where they match contributions or invest in an IRA.

5. Asking for the House during a Divorce

People tend to focus on getting custody and keeping the kids in the house, and they tend to lose sight of the bigger financial picture.  The income decline that follows divorce, particularly among women, is well documented.  According to Research conducted by the Family Research Council, following a divorce, the parent with custody of the children experiences a 52 percent drop in his or her family income.

When going through a divorce, ask your attorney to help you create a budget and determine which assets will help you pay bills.  Not only discuss the option of keeping the house but also discuss the practicality of maintaining the house post-divorce.  Too many people fight for the house to avoid uprooting their children, only to find out that they do not have the cash flow to pay for it.

Knowledge really is power and people who have a keen grasp on their family’s financial picture, are in a far superior position during a divorce and after.