There are several reasons why women may wind up worse financially in a divorce than men. First, women typically earn less than men, making less than 80 cents for every dollar a man earns, according to the Bureau of Labor Statistics. Secondly, women are often the primary caregivers for children and aging parents, which can necessitate time off work, often impacting career advancement. Interruptions in work history can also mean lower lifetime earnings and lower retirement benefits.
If you are a woman headed for a divorce, you should consider these tips for protecting your financial future:
Get financial and legal help.
In general, women involved in a divorce will fare better financially if they hire an experienced attorney to represent their interests. While it may be tempting to “do it yourself” with the help of online legal tools, even if your divorce is an amicable one, you should still have an attorney looking out for you. Mediation is typically a less expensive option for divorcing couples than going to court, and you will still have an attorney to guide you through the mediation process. If your divorce is more contentious, where you suspect your spouse may be hiding assets from you, your attorney can engage a forensic accountant to be sure you receive all you are entitled to in your divorce.
Budget for after the divorce.
The fact is that both spouses usually suffer financially in a divorce, but you can lessen the impact on your finances if you create a priority checklist and budget for your post-divorce life. If you will have custody of the children and are keeping the house, you will need to budget for carrying these financial burdens on your own. Your budget will set the baseline for settlement negotiations, so be sure you are thorough. Include things like your children’s activities so they don’t have to quit them because the money runs out.
Negotiate your retirement.
If you are divorcing later in life, your retirement nest egg is probably the biggest asset you own. Even if you have to give up your home to split retirement assets equally, it may be the wiser choice in the long run. Make retirement a priority in your settlement negotiations.
Establish financial goals.
Establishing clear financial goals will keep you on the right track post-divorce. Even if you are starting over without a big financial cushion, you need to create an emergency fund for any unexpected expenses so you don’t have to go into debt. Prioritize your retirement over saving for your children’s college. They can always get scholarships or loans and there are no loan options for retirement. Consult with a financial advisor, especially if your ex has always handled your joint finances.
We know that family law issues are often difficult, life-changing events. We also know how much it helps to have knowledgeable legal advocates on your side to help you obtain the best possible outcome. Contact us today for your free consultation.