Suddenly Single: Your Steps to Financial Fitness

No matter how well you and your spouse plan for the future, becoming suddenly single is not only emotionally challenging, but often financially challenging as well. In fact, the vast majority of women will be on their own at some point in their lives as a result of divorce or widowhood.¹ What’s more, the average woman’s standard of living drops nearly 45% in the year following a divorce.² If you are a senior citizen the effects can be particularly devastating (75% of the elderly poor in America are women³). Fortunately, there are steps you can take, regardless of your marital status, which can help you toward the road to financial fitness.

The first step is to be proactively involved with the financial side of your marriage from the very beginning. Find out your partner’s money philosophy - and share yours. Will you have joint or separate checking and savings accounts? Who will handle day-to-day money matters and who will be responsible for paying the bills? Even if it’s decided that your spouse or partner will handle the bill paying, know the account numbers and balances; know where the funds are going. Develop credit in each of your own names and discuss details such as a set amount that each of you can spend without consulting the other. Set aside time to discuss money matters on a regular basis; don’t wait until a financial crisis arises.

Develop a “life plan” that integrates your short-term and long-term dreams and goals. Think about the “essentials” such as retirement or funding your children’s higher education, “luxuries” such as a new home or a dream vacation, or even starting a family business. Review your plan periodically and make adjustments accordingly. Should your marriage end for any reason, you should be in a better position to pull together all the financial details you can about your marital assets.

When Facing A Divorce

Review your budget and determine whether you can cover monthly expenses, or find ways to cut costs. If you have children, consult your attorney to be sure that your divorce agreement spells out who will pay what portion of childcare and education costs, including higher education expenses.

If you haven’t already done so, open a checking account (check with your attorney first) and credit card solely in your name. Remember to protect yourself by having your name removed from any joint loan or credit card. By the same token, consult with your attorney before alerting any bank or brokerage account that holds joint assets to freeze those assets until a settlement or some mutual interim agreement is reached.

Understand your mortgage options and determine whether the mortgage should be in your name only or whether you should refinance.

Understand your retirement plan(s) as well as those of your partner. If you have not worked outside the home, consult with your attorney to ensure that your divorce agreement spells out your share of your partner’s retirement and how you will collect it. Also, under certain circumstances, you may be entitled to receive your spouse’s Social Security insurance benefits so check with the Social Security Administration to learn if you qualify.

If you and your spouse own a business or your spouse is a partner in a closely held business, be certain that fair value is considered in determining the “true” value of the business.