It’s often not until divorce comes to town that many women and men really feel the pain of money issues.
But if you know divorce is on the cards, and let’s face it there’s usually a moment of realisation, there are a number of relationship and money tips you might want to consider to help safeguard your financial situation.
It’s estimated that one in two marriages will end in divorce, and when that happens family assets are often spilt, wills are usually revised, and regular incomes need reviewing and the emotional side of things… well that’s just a bit of a nightmare.
Twelve Wealth’s Cathryn Gross told Financy FM that if you know your relationship is headed for divorce it’s time to get the house in order and that includes understanding what your debts and assets are.
Take a listen to her money advice on divorce.
The whole situation also gets a lot more complicated when children are involved.
The fact remains that women who are predominately the primary carers of children are often left financially disadvantaged by divorce and are at risk of making costly mistakes.
Women can become quite emotional about the situation they find themselves in,” said Deborah Kent, president of the Association of Financial Advisers, adding that this can often cloud their judgement on money.
Some of the most common mistakes that women make with money during divorce include:
- Holding onto the family holiday property which is not returning any income and will just cost money to maintain.
- They rush the settlement in a bid to just “move on” without getting the right outcome for themselves.
- They forget about insurances on a house and car.
- They forget to change beneficiaries on superannuation and on their Will.
- They have their own money tied up in an inaccessible joint account.
- And many women don’t seek professional advice because they cannot afford it.
“Sometimes older generations of women have never managed money and things as simple as paying bills, not knowing who the insurances are with this causes high levels of stress in these older women,” said Ms Kent.
“You need to get legal advice, whilst it may appear that these situations can be done in a respectful and amicable way, quite often it does not end up that way,” she said.
Dianne Charman of AMP Financial Planning said it is important that women, young and older, have an up front conversation with their partners about the financials early in any relationship.
“You need to think about whether you are financially a match?
“Love is one thing, but you need to talk money. You have got to get that conversation right about what are we going into financially from the get go in a relationship.
“You need to know what it is you owe and what it is you own. Unfortunately we know of women who still just sign off on paperwork presented to them by their husbands without knowing what assets they are buying.”