Divorce is one big financial and emotional whirlwind that can sweep your feet out from under you. And it turns out that divorces are especially difficult for women. In 2011, the U. S. Census Bureau reported that, “of the women that divorced in the last 12 months, 27 percent had an annual household income of less than $25,000.” Although the statistics report is now several years old, little has changed in the intervening seven years. This shows that the standard of living drops dramatically for women. That’s why it’s important for women to tune in to their financial needs and plan ahead for an independent future.
This post, we’ll look at some of the common mistakes women make when filing for divorce.
“Community property” doesn’t mean everything is necessarily split 50/50
Most divorce proceedings are based on negotiations between spouses, unless you live in a community property state like Texas, where assets are divided equitably. But equitable distribution means that all marital property is on the table and open for a negotiated settlement. It doesn’t necessarily mean everything is split right down the middle. Some states will even consider factors like the length of the marriage, income, and future earning capacity of each spouse when splitting property. So there is no guarantee that you’ll get half of the marital assets and what you deserve in a settlement.
Having no involvement in your finances
If you are an “out-spouse”, like I discussed in one of the previous posts, then you either had limited or zero involvement in the finances between you and your husband. In fact, only 24 percent of women are responsible for daily financial decisions. If you are a homemaker or stay-at-home mom, you may have overlooked bills or bank statements in your quest to manage the day-to-day chores. If you find yourself in this position, make it your mission to get on top of your financial situation by:
Making copies of bank statements and credit card statements
Get copies of joint tax returns
Making sure you have enough money to hire a lawyer or cover any expenses you have until the assets are split
Familiarizing yourself with other financial outlets like retirement accounts, life insurance, or stocks
Failing to realize your standard of living will change
As the statistics indicated, a woman’s standard of living significantly decreases in a divorce, so you will need to readjust your finances to live within your means. Even if you are receiving alimony or spousal support from your ex, you’ll need to carefully consider where the money needs to go so that you don’t overspend your budget.
Misusing spousal support
Since women are more likely to sacrifice careers to stay at home and take care of children, they’re more likely to receive spousal support in a divorce, although the trend is beginning to change across the U.S. Women who receive alimony can make the mistake of viewing it as a paycheck instead of an investment into their independent future, and spend it frivolously. Just as your standard of living will change, it’s imperative to use your spousal support to plan ahead.
If you don’t know where to start in financially planning for your future as a single woman, reach out to an experienced divorce attorney.