Why Financial Planning BEFORE Divorce Is Critical For Moms
According to a new study, approximately 95% of moms don't hire the services of a financial advisor or use a divorce planner before and during a split. In other words, women rarely have a financial plan in place before or when their marriage breaks apart.
Not having a clear understanding of your current financial position, or planning for what your budget will be after divorce, is a recipe for disaster. Here are the hard facts about how avoiding your financial realities can negatively impact you during divorce, and in your life after, and why financial planning makes a BIG difference:
According to The Atlantic article, The Divorce Gap - ‘Despite the common perception that women make out better than men in divorce proceedings, women who worked before, during, or after their marriages see a 20 percent decline in income when their marriages end, according to Stephen Jenkins, a professor at the London School of Economics. His research found that men, meanwhile, tend to see their incomes rise more than 30 percent post-divorce. Meanwhile, the poverty rate for separated women is 27 percent, nearly triple the figure for separated men.’
More often than not, ‘Women leave the workforce for several years, will likely see their earnings stunted when they resume working. The main reason women suffer the brunt of divorce’s financial burdens, according to Jenkins, is that during marriage, they are more likely than men to stop working in order to raise kids. “The key differences are not between men and women, but between fathers and mothers,” he told The Guardian.'
There’s a common perception that women siphon off the wealth of their exes and go on to live in comfort. It’s wrong.
A working woman in the US earns 83 cents for each dollar a man makes, and that's not the worst of it. In other words, they will likely suffer a reduced household income when their marriage falls apart.
Think about women and divorce, and the pains and suffering children of single mothers undergo. You don't want to get caught unawares, so start saving in a private bank account. Don't save solely on joint accounts because the money will end up split between you two during a divorce. Set an emergency fund aside and keep adding to it. You must also pay bills on time to avoid ruining your credit score. Understand that children do well after divorce when their parents financially plan.
As for our stay-at-home mom's, planning is that much more important if you've work inside the home. Everything you've done inside of the home has been an asset to allow your family to function well. Don't let anyone make you feel less than in the negotiation process. Your time, your talent and your support during marriage were and are valuable, and enabled your spouse to be successful at their jobs.
The US Census has reported that five in every six custodial parents are women. Simply put, women will likely be awarded custody of their kids after a divorce. As a mother, you're entitled to child support and alimony. Being able to plan financially to survive without support, and figure out how to plan to add income to eventually be financially independent, empowers you.
Look, you don't want to be in a situation where you're stressing about how to provide for the needs of your kids because you have no income or savings. Start working on a plan now. If you haven't already, make sure you have a college account started as soon as possible, and make sure contributions AFTER divorce are a part of your divorce negotiations.
Another financial hit women take after divorce is that they are likely to lose their private health insurance coverage if it's provided through their spouse. Make sure to come up with a game plan so you don't leave yourself vulnerable to being without health insurance after divorce. Research your current situation, and how that might change after divorce, in advance so you can take into account insurance costs you might have to add into your post-divorce budget.
Although both couples suffer the financial burden associated with divorce, women tend to bear the brunt of the situation. Don't be a victim of poor financial planning.
Here's the good news, Divide & Thrive's divorce planner gives you all the tools you need to tackle this without costing you a fortune.
When you learn how to financially prepare for divorce, and your life after, you empower yourself to take your next steps with confidence while armed with facts. Taking the time to think through all of the above early in the divorce process is a game-changer.
Click HERE for a peek inside Divide & Thrive's Divorce Planner. We've helped thousands of people throughout the U.S. and Canada prepare for divorce, save time and money during divorce, and feel confident about creating the life they want after divorce.
Divorce is hard. Divide & Thrive makes planning for one easy.