Posted on 07/16/2008 7:04:50 PM PDT by fkabuckeyesrule
ANNE BORDEN, MOTHER OF two, wasn't particularly concerned in 1999 when her husband suggested she become the family's sole breadwinner. As a corporate executive, she earned a salary of $200,000-plus — more than enough for the Seattle-based family to live on comfortably.
There was more money: Her husband of four years had just cashed in several million dollars worth of Microsoft (MSFT: 27.26, +1.11, +4.24%) stock options. That windfall would go into savings, they decided, and the family would live off of Borden's paychecks.
Soon thereafter, a red flag appeared: Borden discovered that her husband had deposited the options proceeds into four bank accounts, only one of which shared her name. When she questioned him about it, he said he would change the single accounts to joint ones when he had the chance. He never did.
In 2002, the couple separated. It was only then that Borden (who asked that we not use her real name for privacy concerns) took a good look at the finances and realized she had very little money of her own. Turns out she didn't even have a claim on the proceeds from the stock options. According to the divorce settlement, 80% of the stock options were considered her husband's individual assets rather than joint property because he had received the grant from Microsoft one month before their wedding.
The couple's divorce was finalized in 2004. Borden left her job in October 2002. Now, she worries about her relatively small retirement account and lack of other savings. "Had I known that money wasn't community property, I would have never let him stay home with the kids and live entirely off of my income," she says. Borden blames herself for not understanding the family finances and letting her ex-husband call the financial shots.
It's a common theme among many women. "The single biggest mistake I see women make is that they acquiesce [the financial decision making] to their spouses," says Stewart Welch, author of "The Ten Minute Guide to Personal Finance for Newlyweds" and a certified financial planner based in Birmingham, Ala. "Once they're out of the loop, they remain uninvolved forever." When one spouse controls the purse strings, the other spouse can be left in a vulnerable position when the marriage ends.
This isn't purely a women's issue, of course. Men can just as easily fall into the same traps. But women are more likely to give up careers to raise children, and are more likely to outlive their husbands, says Steven Kaye, a certified financial planner (CFP) based in Watchung, N.J.
Here are five common financial mistakes married women make — along with some advice on how to avoid them.
1. Mistake: Handing Over the Purse Strings
"Ignorance is not bliss," says Patricia Powell, a CFP based in Martinsville, N.J. By not engaging in the family finances, women set themselves up for potential hardships. Powell says she has worked with at least two clients who managed their finances perfectly well while they were single, only to file for bankruptcy after they got married because of their husbands' premarital debt and extravagant spending habits.
Solution: Pay Attention to the Household Finances
Both partners should attend the meetings with insurance agents, accountants, financial planners and lawyers, says Watchung, N.J.-based Kaye. Women should also look over monthly bank statements and credit-card bills. And Kaye recommends that couples make a list of all bank and brokerage accounts and insurance policies and keep it with other important documents, such as wills and medical directives.
2. Mistake: Losing Your (Financial) Identity
When Elizabeth Lundin (who asked that we not use her real name), now 33 years old, got married six years ago, her husband offered to take over the couple's finances. She happily agreed. The couple merged all of their bank accounts, and Lundin even gave up her individual American Express card and started using a shared credit card. Two years later, when the couple decided to divorce, Lundin learned that the couple's credit card was actually held in her husband's name, and that she was simply an authorized user. Her name was taken off that account, and she let many months go by before trying to secure credit in her name. When she tried, she found that her lack of an active credit history worked against her. She was offered only high-rate cards with small lines of credit.
According to Craig Watts, spokesman for Fair Isaac Corporation, the company that helps generate consumer FICO scores (the most common credit score used), the credit bureaus won't calculate a FICO score for an individual whose credit history has been inactive for six months or longer.
"[Recent] college graduates had an easier time securing credit than I did," Lundin says. She says it took her two years to get a card with a competitive interest rate and sizable credit line.
Solution: Maintain Some Individual Accounts
"You always want to maintain your own credit identity," says Lisa Caputo, president and CEO of Women & Co., a division of Citigroup. She recommends that couples keep three bank accounts (his, hers and ours) and maintain separate credit cards.
3. Mistake: Walking Away From Your Career
The number of stay-at-home moms has increased by 18% over the past decade, according to 2006 U.S. Census data. While you might welcome the chance to stay home with your kids, the longer you're out of the work force, the harder it can be to jump back in. Women often face lowball wages or lower job titles when they try to return to work after a long hiatus.
Solution: Keep Your Skills Fresh
It might be hard to do when you're up to your eyeballs in dirty diapers, but unless you're independently wealthy, you should always be aware that you might someday return to the work force for one reason or another. (Kids, after all, do grow up.)
So don't lose touch completely. Try to take on consulting projects during your industry's busy season and attend professional networking events. Even charity work can give you a leg up when you start applying for a new job. For more tips on re-entering the work force, read our story.
4. Mistake: Not Saving for Retirement
Many married women don't make retirement-saving a priority. If the husband is the primary wage earner, the wife often trusts her spouse to save enough for their collective golden years, says Ginita Wall, a certified financial planner and co-founder of Women's Institute for Financial Education, a San Diego-based nonprofit dedicated to educating women on finances. Compounding the problem, women are more likely than men to blow what little savings they have on something other than retirement. Nearly 24% of women who take a lump sum distribution from a retirement plan spend the money on general consumption, vs. 19% of men, according to the Employment Benefit Research Institute.
A woman spending her retirement savings is particularly distressing considering that women, on average, live six years longer than men.
Solution: Penny-Pinch Now for Your Future
Make saving for retirement a priority, says Women & Co.'s Caputo, even if it means stashing away less for your children's college education. If you're working, save as much as you can in your company's retirement plan, or in an IRA. If you're not employed, contribute to a spousal IRA, which has an annual contribution cap of $5,000 in 2008 ($6,000 if you will be age 50 or older by the end of the year). Click here for more on these accounts.
5. Mistake: Asking for the House During a Divorce
When Borden separated from her husband, she decided her priority was to get custody of her two children. So she hired the best child custody lawyer she could find. Looking back, she says she now regrets her decision to focus on just one issue and wishes she had found a lawyer who had also looked out for her financial well-being. While she succeeded in getting custody of the kids, she is now struggling on the meager child-support payments her lawyer negotiated for her.
Borden's story isn't unusual. Women often focus so intently on winning custody of the children or keeping the house that they lose sight of the bigger financial picture, says Wife.org's Wall. On average, a woman's standard of living decreases by 27% after divorce, according to Richard Peterson, of the Social Science Research Council.
Solution: Get Financial Guidance
When women are going through a divorce, they need to determine which assets will help them pay their bills and reach their long-term goals. Some women might want to consult a financial planner, says Wife.org's Wall. Too many women, says Wall, fight for the home to avoid uprooting their children, only to find that they don't have the cash flow to pay for it.
To help you get a handle on the value of your assets, see our Property Settlement Calculator.
/johnny
I seriously doubt that I would marry anyone with massive debt. It's amazing to see women do their jobs really well and successfully and then they'll marry some man that they probably wouldn't hire to clean their toilet.
The real problem was not having a clue about what REAL men need.
And listening to their 'girlfriends', when they should have paid attention to the men that put them where they are.
Just the way I see it, after 3 strikes. No animal was injured during this post, and the toilet lid is down.
/johnny
I see men and women who I think are pretty smart...till I see who they married or are going to marry.
SOLUTION:
Don’t Marry.
I have no sympathy for the first woman. She was trying to get her hands on the money her husband made before the marriage.
I stopped reading from there.
Word of advice to all spouses. You’re not just choosing a lover. You’re also choosing a business partner. Choose wisely.
I sense a good deal of sexism in this article
1. Most women plan their divorces (for years). I know a few and one who is currently in the process. While I don’t wish this woman ill will, she is the exception, not the rule.
2. If she was making over $200K and was an executive, how come she was such a dumbo about her finances? It makes me think she probably wasn’t much of an executive which might explain why she is no longer there.
3. If her husband didn’t put the money into joint accounts, she should have given him a week to get it done...for goodness sakes he was free everyday.
4. Why should she get a check from him when she was the bread winner?
5. Should have kept on top of divorce law and not make the same mistake twice by leaving the details to your lawyer. I wonder how attentive she is to the kids if she can’t learn to pay attention to her own life.
But, then, so does the husband's. Two can't live as cheaply as one, but it does cost more to live separately than together.
# 1 Rule: Know the other parties "Credit Rating" before getting married.
I don't blame her for trying to get her hands on 50% of her husband's stock options, though. She didn't know he got those prior to marriage and they were off limits.
She is just lucky he didn't ask for alimony, as he might well have done. In any case she is lucky to be free of a bum who lets his wife support him. I've jettisoned relationships with several men who wanted me to support them. A real man pulls his own weight.
I don’t get it. She’s struggling to make ends meet with a 200K salary? Don’t look to me for sympathy.
WTF were you in 1979? ;)
I am taking your advice now.
/johnny
Welcome to Equal-World ladies.
As Mark Twain said, “The art of prophecy is difficult, especially with regard to the future.”
For those who couldn’t figure it out themselves, Women’s Lib-101 should have had more on what to do with the spinning wheel when you catch it and less on doo-dad cutting.
Always? Just how many times do REAL men get married?
He had already won his portion of the bread...shame on her for not covering her ass...etts.
Sorry, but I think the biggest mistake women make is when they stop being sweet and thoughtful to their husbands. Flame on.
I hate divorce with a passion.
I respect the sanctity of marriage.
My path.
Not suggesting anyone emulate it. Think of me as the negative example.
/johnny
They left out number six......
Having so many piercings that ya sound like yer wearing spurs when ya walk !
2. Act like Satan to your husband.
I tried to help him remove the dangly, shiny bits, but he just yelled.
My bad.
/johnny
I agree with you 100%. It is a lot easier if you have more than two cat.
I agree with you 100%. It is a lot easier if you have more than two cats.
The more I learn about women, the more I like my laptop.
The problem is, assholes like this make all men look bad.
I don’t like how men get reemed in the courts when it comes to divorce, but I don’t think men should be holeing away funds so they can screw the spouse over either.
If you’ve been married for a long time, community assets should be joint and evenly divided. I do recognize there are circumstances where funds can legally be set aside, by mutual agreement, but baring that, this really angers me to this guy do this.
D1
I like em ......on bad guys !
They work just like they are supposed too for control of dumb animals ! If yer quick and can snag that nose, nipple or earlobe accessory it is a win win situation !
Have convinced my married daughter to keep money in the Women’s National Bank.
And she does! As do I!
BTW: This writer should acknowledge that in a lot of families, the women take care of the finances. If he/she thinks this is a one-way street, they really aren’t as wise as they think they are.
BTW2: I can tell this nitwit that my standard of living went down by far more than 27% during my divorce. Make it about 75%.
She kept the home. I took the debt and paid child support.
LOL, has this guy got a thing or two to learn.
I was just thinking about how if I went to a bookstore in the 90’s I would flip thru alot of the books in the bookstore that dealt with relationship (i.e., Men are from Mars, women from Venus). But when I go to a bookstore it does even occur to me to look at the relationship type books. It’s sports, history or politics or christian books.
I tend to agree. I've never been married to a spendthrift, but I did own a business with one once, which is similar. My business partner and I hit it off really well and agreed on most aspects of running the business, with one huge exception: the finances. I knew I had a problem when he started charging his personal expenses on the company Amex card, but initially he brought in enough extra income to cover the bill, so I put up with it because I wanted the business to succeed. Then he started paying himself "advances" on his salary, which he never paid back to the business. The last straw was when he wrote himself a check on the account in which the employee withholding taxes were held (we withheld every pay period, but paid the taxes quarterly). Then I knew I had to get out before he bankrupted me.
I did get out, and had to settle with several of the business's creditors to get my name off the business's debts, which my ex-partner and I had personally guaranteed. I've paid out over $25,000 so far from my own pocket, and I'll never get it back. My ex-partner continues to live beyond his means, but without me to subsidize him, it's catching up with him. He has now gotten himself and the business into big trouble with the IRS for not paying withholding taxes and is also being sued by the business's secured creditors. He'll probably wind up in bankruptcy court soon.
But I learned my lesson well. I will never marry (or go into business with) anyone who cannot handle money responsibly. It just causes too many problems, even if everthing else about the relationship is great.
That lesson?
/johnny
LOL, no it wasn’t that. I just wanted to leave things in tact for the kids.
Here’s something they didn’t mention.
If you decide to be a stay at home mom (which I did), even if you’ve worked for years before you quit to stay at home, once you’re out of the job for 10 years, you lose SS credits and would not be able to claim SS disability should you become disabled.
I worked for 15 years, paid into SS, had a child and quit. I’m working again now that he’s grown and have earned enough credits to once again qualify for disability so there’s no real problem, right?
EXCEPT that I was diagnosed with MS just after I had been out of the workforce for 10 years, and had my MS been more severe, I would have not been able to file for disability through SS nor would I have been able to return to work to gain back the needed credits.
So it’s something to consider because you can’t buy private disability insurance if you’re a mom who’s not in a regular job (they say you don’t really have an income, so there’s no basis for reimbursement.)
And if you don’t have group insurance (which thankfully we did and still do), and happen to come down with an illness, then you’re not in a good position at all. Your illness can be considered pre-existing, even if you were to once again get group insurance (usually there’s only a certain time limit that it is considered pre-existing.) But as far as private health ins. or life ins. forget it. So get your ducks in a row, so to speak, before you decide to leave the workforce because you never know what life will throw at you.
This first lady’s problem was that she chose a man of poor character in the beginning. Do a credit check - it is very revealing in terms of personal responsibility and character (temporary emergencies aside). She had two red flags in the marriage: her golddigger husband wanted a meal ticket and he stashed away all the money while planning his getaway. Check for multiple affairs and another woman at the time of breakup.
/johnny
I always say they look like they fell down the stairs carrying a tackle box.
Excellent advice. I could have saved myself a lot of money and misery, had I heeded it before I went into business with my ex-partner (see post 31 above). I will never again be so naive.
Ladies, husbands are simple beasts. If you want to keep ‘em around, then take moderate care of yourself (no, you can’t hide 50 pounds and think he won’t care), make one joke a week, dress up once a week, jump his bones once a week, and plan on one day a week where you don’t ask him for a single chore or complain about a single fault (or pout).
Bonus points to you and your marriage if you can find a single thing to loudly compliment him on each week, but this is not required. Double points if you complement him in public.
If he can’t find the time for you or your kids at that point, then give him a single warning before you leave. Carrot. Stick.
If the husband still cheats, gripes, or God-forbid is violent, then maime or leave the SOB at that point.
If the above is just “too much” considering all of the other things that you do in life, then you are married to something else besides your husband. Once a week, ladies. It ain’t too much no matter how you slice it.
There's even an argument to be made for getting back the money FedGov stole from you.
To each their own. I can't take money from a government, unless I'm serving in uniform.
So when times got tough, stuff got shut off.
Family provided food.
I found it to be a good idea to restart a couple of careers. I rolled craps on one, because I'm not young enough to handle a kitchen anymore.
The other, it's paying bills.
I will never, ever take money from the feral government unless I am in uniform, or on contract. Even if it means leaving my stolen money there.
/johnny
Sounds like good advise to me.
“Asking for the House During a Divorce”
I thought this article was about married women? Sounds like a rather immature and doomed woman who wrote this.
You don’t intend on taking Social Security when you reach 65?
Me too :-/
And the stuff I could get for free right now? Don't even ask. I didn't ask for my disabilities. I have them. I'm not even willing to go the VA anymore.
I'll take a small paycheck for doing something useful.
And then the catz can eat me or something.
I will authorize my children to accept the flag for my service. I paid for that.
/johnny
Women and minorities hardest hit.
Unless his standard of living is no longer dragged down by her spending every dime he makes on herself.
She probably was a Diversity Co-Ordinator, Head of the Womyn's Studies Department or worked in HR.
Option: shoot the guy, honey. They’ll let you off easy.
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