No one who gets married goes into it thinking they’ll get divorced. Everyone wants to believe they’ll be different and their relationship will be able to withstand any storm that comes their way. Unfortunately, as we know, that’s not always the case. In fact, the divorce rate is around 40 to 50 percent. That’s why every woman should protect their finances from the threat of divorce just in case.
If nearly 1 in 2 marriages will end in divorce, it’s important to be practical and prepare for the potential end. It won’t “jinx” your marriage or make it doom to fail. It can make sure that no matter what happens, you’re strong enough to take care of yourself. This is especially important for women.
Women tend to be much worse off after divorce and have competing financial priorities that make it difficult to get ahead.
Women take on the bulk of caregiving duties
Though things are starting to slowly shift, the fact is women take on the bulk of caregiving duties for young children as well as aging parents. As we’ve seen during the pandemic, women are being pushed into caregiving duties at home while trying to figure out school and work as well.
In fact, many women have been pushed out of the workforce, having to make an impossible choice between earning a living and taking care of a child.
On top of being the de facto primary parent in the household even in two-parent homes, women are often the ones taking care of aging parents. In fact, according to AARP, 2 out of 3 caregivers are women. Plus, women tend to do more and take on more of the emotional burden dealing with caregiving duties.
Women get more custody, less child support
There’s data that shows that around 90 percent of the time women get custody of children. That may not be a bad thing, but obviously, you need to consider the time and money implications of that.
Having a single parent, time-wise, is hard enough. But having a single-income household is even worse. For women who have gotten divorced and get custody, there’s the obvious route of getting child support.
But according to data from Census.gov, only 44% of custodial parents get the full amount of child support payments. That means 56% of the time, custodial parents are getting less.
And this definitely affects women more, with the Census.gov site stating, “The poverty rate of custodial-mother families in 2015 (29.2 percent) was significantly higher than the poverty rate for custodial-father families (16.7 percent).”
In other words, women are often saddled with the responsibility of taking care of additional people such as children and aging parents and may not receive the total amount or any financial compensation for doing so.
Caregiving in and of itself is a full-time job and can require women to take time off, work reduced hours or pause their work-life for a period of time. All of these things come at a cost of course.
Women are more likely to end up in poverty, post-divorce
Women already earn less than men in general. But it doesn’t stop there. Women are more likely to end up in poverty post-divorce as well. This is particularly true for divorces that happen after 50, often called “gray divorces”.
According to an article on Bloomberg, “They [the researchers] found that when women divorce after age 50, standard of living plunges 45%. That’s about double the decline found in previous research on younger divorced women. Older men see their standard of living drop 21% after a divorce. Previous studies have found a small or negligible effect of divorce on younger men’s incomes.”
How to protect yourself financially
As you can see, the threat of divorce becoming reality can be a dire situation financially for some women. While that might not be the case for everyone, it’s still something to prepare for, just in case. Here are some things you can do to help.
Keep some money of your own
When you get married, you might choose to merge all of your money. And that’s okay, but you want to still have access to some of your own money, too. Why?
You never know what might happen. The threat of divorce actions like financial abuse or domestic violence could happen. In more mild terms, things could fizzle out and you want funds to be able to start over, which could include moving to another home, buying a vehicle, etc.
Money is a tool for freedom that also gives you choices. Keep your money in a high-yield savings account. Having your investments for retirement is a good idea too.
Maintain good credit or work to rebuild credit
I’m not a huge fan of the credit system as it relies on taking out debt to maintain a good credit score. However, having a good credit score comes with perks.
If you have to move suddenly, your credit will be checked if you move into an apartment or need a new mortgage for a home. If you must take out a loan to get by, you’ll get better interest rates too.
You can check your credit report for free at AnnualCreditReport.com to make sure everything is accurate. Limit how much you charge on your credit cards, as keeping balances low is good for your credit score. Making your payments on time is the best possible thing you can do. Plus, limit borrowing to only what you need, when you need it.
Consider a postnup
If you’re married and didn’t get a prenup, you can still get a postnup. This is supposing that things are okay, you just want to be proactive with protecting yourself. Obviously, this can be a touchy subject, so you want to be clear and kind when going about it.
You can say something like, “I was thinking about ways to manage finances should anything happen to us and am considering a postnup”.
You want to be clear on what it might look like and do your research ahead. This should be done carefully so as to not trigger divorce worries. But you also need to do what you need to do for yourself in case the threat of divorce turns into a reality
Like my friend Erin Lowry of Broke Millennial has said, if people don’t have a prenup and a plan for divorce, their state does. This can be complicated in community property states, where there is a 50/50 split automatically.
If you live in a community property state, you may want to look into a postnup even more if you’re not thrilled with the idea of everything being split down the middle.
Divorce is heart-wrenching for anyone but financially, it affects women even more. You don’t need to live in threat of divorce if you’re happily married, but it’s important to acknowledge it’s a possibility and prepare in whatever way you can.