Divorce takes an emotional and financial toll on women, and the financial impact can be even worse when feelings run the show. Frustration and anger can lead to poor long-term decisions in the heat of the moment, so it’s best to have a plan in the beginning and stick to it. Sometimes one spouse want to “play fair” while the other is protecting their own interests. You can’t be naive and you can’t be passive. There are some common-sense steps any woman can take to be prepared to navigate the financial hurdles of a split. If you need a little courage, take some advice from Liz, a woman who knew her way around a divorce:
"Pour yourself a drink, put on some lipstick, and pull yourself together."
- Elizabeth Taylor
1. Open New Bank and Credit Card Accounts in Your Name Only
This is the most important thing you can do before you initiate a divorce or as soon as your spouse asks for a split. You risk being closed off from money in the short term if all your liquid assets are in joint accounts. Your spouse could clear out your checking and savings accounts without your consent or freeze your credit cards. If you have your own funded accounts with enough money for at least 6 months, then you can weather any short-term storms without worrying how to cover expenses. You should also check your credit score and make sure everything looks accurate.
2. Know the Online Passwords of All Accounts and Make Copies of Financial Records
You can’t keep an eye on your joint accounts and make changes if you can’t access them. Make sure you know how to get to them online. Make copies of any hard-copy records you have of insurance policies, wills, trusts, tax returns or other legal documents. At some point in your divorce you will need to complete a financial declaration that asks for proof of taxes, debts, assets and monthly financial obligations. Don’t risk your spouse hiding or disposing of these documents before you can make a copy.
3. Take Pictures of Everything in the House
There’s a good chance that one of you will move out of the marital residence as you go through divorce proceedings. If you’re the one to leave, you may no longer have access to the property and no way to prove that the things important to you existed. As early in the process as possible take pictures of anything valuable. Even if it is something you may not want to fight for in the split, document it as something to negotiate against.
4. Protect Yourself from Your Spouse’s Debt
Debt is divided post-separation by who incurred the debt. Translation: if the debt is in one person’s name it’s theirs, if it’s under a joint loan or credit card then the responsibility is shared. There’s not much you can do about joint debt, but if you have a shared credit card you can freeze additional spending. You don’t want your partner running up charges in anticipation of a split. If you do see this happening then it could be a red flag that something is about to go down. Keep monitoring your card activity and your credit score.
5. Build a Cash Reserve
This may sound basic, but build a 6-month cash reserve. I’ve had many clients who have built up a reserve slowly by taking out an extra $20 at every grocery store purchase. This cash will help you establish a new residence, pay legal fees and living expenses and cover kids’ expenses until spousal support is established legally. Start by understanding in detail what your monthly spending entails for both you and your children to determine how much you will need.
6. Don't Make Any Financial or Legal Decisions Based on Guilt, Pride or Shame.
Take a breath before you sign any legal documents. Get a second and third opinion. Don’t just give in because you’re tired and frustrated. It feels like the right thing to do now, but a few years down the road you’ll regret it. Trust me. The human brain is programmed to prioritize current rewards (lack of conflict) over future rewards (a fair settlement). Try to override this instinct and focus on what will be best for you and your family 5 or 10 years from now.
In my heart of hearts, I believe that a lot of people don’t truly understand why we elected Donald Trump a few weeks ago. If Facebook is a guide, then many who oppose him think it was because half the country is made up of white supremacists who want to repeal the 19th amendment. I don’t think Donald Trump got elected because he created a slew of new racists, homophobes, and misogynists. I think that the people we’ve seen giving Nazi salutes and punching fellow diners in the face because of differing political views probably held those beliefs well before CEO Trump became Candidate Trump.
Has he emboldened these people? Yes. Has he given these views more legitimacy? Yes, and that’s horrible. But these were never Hillary Clinton voters, and they were not the deciding factor. Those of us who want to avoid seeing another candidate who appeals to humanity’s most primitive views need to identify the real root of the problem and solve it.
The people that made the difference in this election are the ones who don’t feel like they have the luxury of worrying about social injustice
I think the people that made the difference in this election are the ones who don’t feel like they have the luxury of worrying about social injustice. These Americans prioritized housing and feeding their families, finding and keeping a job, and making sure their kids are healthy. I would bet that most – most, not all – of them don’t agree with the way that Trump inflamed the so-called “alt-right” movement, but their basic needs took priority. They’ve been feeling financially marginalized for a long time now, and they decided that trying something different than the status quo could potentially produce different results. This doesn’t make these voters crazy, it makes them human.
In 1943 Abraham Maslow proposed his famous “hierarchy of needs”. This is a theory in psychology describing the patterns of human motivation. He identified the basic types of motivations and the order in which they should be met. I think that this theory clearly explains the results of this election.
The most basic needs are physiological. A human cannot survive without air, food, water, shelter, clothing and sleep. Just after the physiological needs come safety and security, which includes financial security, personal security and health. The next level of motivation involves love and belonging, followed by confidence, achievement and respect for others. Finally, the last level is about self-actualization, which includes morality.
Financial security comes just after things like eating and breathing
Think about that for a second. Financial security comes just after things like eating and breathing, while respect for others and morality come waaaaay after all the things that help us stay alive. An auto worker in Detroit who has been unemployed for 8 years and a New Yorker drinking $15 cocktails may have the same outrage over the hateful behavior they’ve seen from some Trump supporters, but the unemployed person prioritized the hope that shaking up our political and economic system could change their situation. They’re not sure what might happen, but they’re willing to roll the dice because what they’ve been experiencing financially hasn’t been working. It’s the same logic that propelled the popularity of Bernie Sanders in the primaries.
On some level, I can sympathize with that decision. I’m lucky that I can satisfy enough of the basics to put a high priority on respect for others. Of course, there are exceptions to every rule. There are wealthy people full of hate, and poor people fighting for the rights of others, but my guess is that the voters who swung Michigan and Pennsylvania and Ohio are mostly worried about what the future holds economically for themselves and their families.
The vile rhetoric and actions we’ve seen should absolutely be denounced, but, by nature, I’m a practical person. I want to fix the roots of the problem.
Happiness is a relative concept
It’s difficult to argue that the growing divide in terms of income and wealth in this country isn’t a major contributor to the growing divide in ideology. This is just common sense. Happiness is a relative concept. You can find endless studies that show people who make $30,000 feel great when their neighbor makes $20,000 and people who make $200,000 feel lousy when their neighbor makes $250,000. When 99% of the country is looking at their ruling class making significantly more than they are, and not being terribly productive in the process, the angst is understandable. Maybe if we can close the gap a bit we can help our fellow citizens move up that pyramid of motivations toward respect for others.
This topic is a little off the beaten path of personal finances, but there is a connection. If you don’t have your financial house in order, it’s difficult to focus on improving things like confidence, experiences and achievement. Conquering this basic area of your life will allow you to devote energy to other problems, especially when you’re going through a life transition like divorce.
From: A Guide to Statistics on Historical Trends in Income Inequality
By Chad Stone, Danilo Trisi, Arloc Sherman, and Emily Horton
Center on Budget and Policy Priorities, a nonpartisan research and policy institute
November 7, 2016
“The share of before-tax income that the richest 1 percent of households receive has been rising since the late 1970s, and in the past decade has climbed to levels not seen since the 1920s. The vast-majority of the increase is accounted for by the rising share of before-tax income going to the top 0.5 percent of households.”
“Wealth is much more highly concentrated than income, and concentration at the top has risen since the 1980s.”
This week I attended a panel discussion hosted by Ellevate Network, the women’s professional organization (@EllevateNtwk). The topic was “America’s New President: Fast-Tracking Issues Affecting Women.”
When I signed up for the event last week I assumed it was planned in response to Donald Trump’s victory, but I learned that the event was scheduled prior to Election Day. Panel moderator Mark Lipton, a professor at The New School, opened the night by saying how different he thought the discussion would be just a week ago.
Considering the subject matter and the almost completely-female audience, there wasn’t much hand wringing over the election results. The discussion was overwhelmingly positive. It focused on moving forward and our responsibility as women to take action. The message was that talk is cheap, get out there and do something.
Our panelists were diverse and brought a range of experiences. Sallie Krawcheck, the Chair of Ellevate, spent decades as a leader on Wall Street, working within while fighting the old boys club. Lauren Leader-Chivee, Founder & CEO, All In Together (AIT), a non-partisan organization dedicated to teaching women how to have voice in politics. And Jamia Wilson, Executive Director, Women, Action and the Media, who is a leading voice on feminist and women’s rights issues.
It was an inspiring discussion. All of these women have created their own paths in fields largely dominated by men. There was no secret to their success – it was purely determination and hard work. It inspired me, as an entrepreneur, to keep pushing forward even on the days that feel like I’m swimming through quick sand. These are a few of the other insights I gained from the night.
The World Is Not a Meritocracy
Where was this advice when I was 22? I had a wonderful father who always told me I could do and be anything I wanted, but he definitely led me astray by instilling the idea that being smart and working hard would lead me to success. Early in my career I tried to be the best employee I could be and sat back waiting to be recognized for my work. Waiting and waiting and waiting. Never asking for a raise, never asking for a promotion. Surely my contributions were obvious and I would be rewarded for them.
The reality is that we do need to be smart and work hard, but we also need to actively promote our own contributions. My aha moment came in my early 30s when I discovered that a guy I worked with made the same amount of money as me. He was lazy and the rest of us constantly had to finish his work and correct his mistakes. On top of that he wasn’t a very nice person. When I confronted my boss about this, his answer was that this guy repeatedly pushed for more money. He said, the squeaky wheel gets the grease. Lesson learned. The next time I received a job offer, I renegotiated my starting salary and my vacation days.
Women Don’t Have to Act Like Men to Be Successful
This comment surprised me a bit since it came from Sallie who rose to the top ranks of traditional, male dominated Wall Street institutions. I had always assumed that she must have played the game “their” way. It hit home because I’ve always struggled with taking the rules as a given or doing things my own way. I’ve done a little bit of both.
I believe that “acting like a man” isn’t necessarily a bad thing. I’ve learned a lot from my male colleagues. The younger me used to hesitate to speak up in meetings, analyzing whether my question or comment was dumb, only to have a guy say almost the same thing and be praised for it. I’ve learned to negotiate better and I’ve learned to stick to my professional boundaries.
The funniest thing I’ve learned from my male colleagues, and I’ve heard this from several, is that they often do a bad job at things they don’t want to do so that they’re not asked again. I think this is difficult for most women to comprehend. In general, I believe women have a hard time showing that they’re “bad” at anything. The implementation might not be totally honest, but the motivation behind is a good lesson. If there are things we are asked to do that are taking time away from what we should or need to be doing, then push back is necessary. There certainly are times when we all need to take one for the team, but if we do that too often we risk it becoming an unproductive pattern and could stifle our advancement.
Not All Women Support Other Women
This one is tough to swallow, even though it should be obvious. Not all men support other men either. Why would all women like and support each other? We must be discriminating in who we trust at work and in life. I’ve certainly experienced a high level of scrutiny and discrimination from some of the women I’ve worked with throughout my career.
One of comments from the panel was that this is a generational issue. “Older” women – which is clearly a subjective delineation – had to fight for the few female seats at the table. If one woman got the promotion, chances were that another would not. It was a zero-sum game. Today, it doesn’t feel like one woman’s success must mean another’s failure. Women are still grossly underrepresented in senior management and board seats, but we are making progress. I believe this is a grass roots effort and every small way we can support other women’s success is beneficial. Let’s make this a case of a rising tide lifts all boats.
Yowza, this has not been a great week. A sweet young guy who worked in my building, only 24 years old, died in his sleep from a burst appendix. My dream of electing the first female president vanished in front of my eyes. I had an extremely uncomfortable situation with a man who wouldn’t take no for an answer. And finally, I found out that a friend from high school, one of my fellow cheerleaders and my morning ride to school, tragically passed away and left 3 young sons. I’ve done my fair share of crying and I'm ready to start over on Monday.
Rob Base nailed it, life is both joy and pain, sunshine and rain. I’ve taken away two important reminders from these sad experiences. First, life is short. This certainly isn’t breaking news, but when we get wrapped up in our petty day to day problems it’s easy to forget how fragile and fleeting our time here can be. We need to wring as much happiness from each day as possible. Second, it’s not always easy being a woman. We face some unique challenges and need to be prepared for them, both emotionally and in practice.
On the surface, these two conclusions seem a bit contradictory from a financial perspective. Life is short – live every day like it’s your last! But…we need to be prepared, responsible and tough. I believe that we can marry these two ideas to build a responsible yet fulfilling future. These are my suggestions on how to strike a balance in your financial life between planning and enjoying: