Six Financial Tips for Women Going Through Divorce

By Ruth Hayden

When I work with a woman who is in the process of divorce, I give her six pieces of advice to help her as she is negotiating the final divorce settlement:

1. Get an independent investment professional to evaluate all of the investments that are marital property. Many financially inexperienced women assume that if one investment is valued as $10 and another investment is also valued at $10, these two investments are equal. This is not always true. Even though the value may be the same, the quality and the liquidity may be very different.
2. Consider selling the house before the divorce is final. Women have told me they want to keep the home because it is familiar to them or because the children need the stability it offers. As hard as it is to admit, though, the bottom line is that often a woman cannot afford to stay in the family home after the divorce. Because she is living on less income, the utilities, maintenance, taxes and mortgage can overwhelm her budget.
3. Do not give up your rights to your husband’s retirement money, even if it’s part of the bargaining to keep the house. Eighty percent of women over the age of 65 are not receiving money from a pension plan. One reason is because women gave up their share of their husband’s retirement money.
4. Have your husband carry a life insurance policy on himself with you as the beneficiary. If your husband provides maintenance or child support, this insurance is essential to your financial security.
5. Tell the truth about yourself—without embarrassment. I have worked with many women who have misled their lawyer and rehabilitation counselor about the type of marketable skills they have. When a woman doesn’t tell the truth because she’s afraid of appearing incompetent, the settlement doesn’t include enough time or money for the adjustment and retraining she needs.
6. Get on a budget—right away. Many women tend to feel rich right after a divorce, because they have never handled that much money before. Many feel a sense of freedom and spend a great deal, not remembering, though, that this money is finite—limited. When it’s spent, it’s GONE.