Married Women - Don't Make These Financial Mistakes

"Love is blind" is the saying. It's true, especially if it comes to financial decisions in the marriage. Oftentimes, one spouse trusts the other to handle the financial responsibilities. Most often, it's the wife, who relinquishes the financial decisions to the husband. This can have disastrous consequences, if the marriage ends through divorce or the spouse's untimely death. Even, if the 'responsible' spouse falls ill and is unable to continue the financial decisions, it can have terrible consequences for the family.

My mother is 'old generation'. She quit her job, when her first child was born. She handed over all the financial responsibilities to my father. This worked out great for several decades. However, my father became ill and required a lengthy hospital stay. My mother was unfamiliar with modern banking. She did not even have a driver's license. Fortunately, we, her children, were old enough to help out. My father was able enough to let us know where to find things like ATM cards and insurance information. My mother learned her lesson and became more involved. Granted, this was a minor problem. You might even think you are a modern woman and familiar with the banking stuff and such. You might have your own ATM and credit card. But do you really know your family's finances, if your spouse handles the money?

If you blindly trust your spouse, you might be in for a rude awakening. Do you know, if your spouse really made the right financial decisions? How close are you to bankruptcy? Is your spouse hiding money from you? If your spouse is preparing for a divorce, assets are easier to hide from you, if you are ignorant of the financial matters. You might feel you are financially well off even if out of the blue your spouse decides to divorce you. However, once the money is hidden away, it will be difficult to recover your portion. Furthermore, assets acquired before the marriage will return to the respective spouse. You have no right to your share in it. Thus, if your spouse brought the house into the marriage, your spouse will take it with him out of the marriage.

Therefore, both spouses should know the family's finances. There should not be financial secrets, including salaries. You should know which bank and investment accounts, and insurance plans were obtained. You should both review the monthly statements and know your monthly bills. Both should also know, where the important paperwork is kept.

Both spouses' names should be on the accounts. Both names should also be on major assets, especially if both incomes contribute to mortgage or loan payments. Your spouse should not be able to simply drop your name and move on with life, leaving you with nothing. That said, it is also important to maintain your own continuous credit history. Without it, you will not be able to acquire credit on your own, if necessary. You will need your own financial identity to do so. Make a point of acquiring at least one individual bank account and credit card in your own name. Again, it's important that the financial matters are open. Both spouses need to know about ALL the accounts and what the credit card limits are. Hiding something always sets off red flags!

Furthermore, make sure that you have your own money for retirement. Don't simply rely on your spouse to make these provisions for you and to make the right decisions. If you have your own job, try to maximize your 401k and/or pension plan payments. You should also invest into your own IRA. This is especially true, if you are unemployed. It is a mistake to solely rely on your spouse's retirement plans. Besides that you both can stash away more for retirement with two IRA's, if your spouse passes away, your spouse's social security and pension plans will only pay a lesser percentage of the monthly pay-out amount to you. This will often not be enough for you to live on. In case of a divorce, you might be without a retirement plan.

Another common mistake is to completely concentrate on raising your children and taking care of your family and household. You don't have to give up on the dream of being a stay-at-home mom. However, take into account the consequences of walking away from your job and career. You have to understand that in today's world your job skills are quickly outdated. The longer you are away from the workforce, the harder it will be to get back into it. You will most likely face lower wages and salaries and/or lower job titles upon your return. Even if you originally planned to never return to the workforce again, you never know, if you might be forced to do so.

Therefore, as difficult as it might be, when you are juggling household and kids, try to keep your skills up to date. At the very least stay in touch with your former co-workers and contacts just to know what is new in the business. Try to take classes to improve skills where needed. Networking is important to get back into the business. If possible, attend local professional networking events or maybe even some conferences. You can also offer your skills on a consulting basis to your former employer or others in the industry, especially when you know they will be busy and might need a hand. If your job skills might be beneficial to a charity, try to apply them on that basis. Any type of job skill maintenance that you can add to your resume will be helpful once you go job-hunting again.

Now, if push comes to fall, and you are faced with a divorce, the first thing especially women will think of is to get custody of the children, and to keep the house. The most important things in your life, right? The children and the safe environment they are used to. What could be more valuable?

Of course, the custody of the children is important and is worth fighting for. However, you have to think about the big financial picture and not just focus on one or two things where you might think it will hurt your spouse the most. Don't just concentrate on fighting for one or two single items. Yes, the children are important, but so is being able to provide a roof over their heads, food on the table, and clothes for them to wear. If you want custody of the children, make sure you will get a sufficient amount of assets and alimony payments to support not only your children but also yourself as a caregiver over a long time frame. Most people focus on keeping the house to have the roof over their children's heads that they are used to. In case of a divorce, getting the house is nice, if you can make the payments on it and pay the bills to maintain it, as well as all the other living expenses you will face. It is also often difficult to sell to get the money out of it you will need for your living expenses. If you would have to struggle, does it really make sense to fight for one major asset? Therefore, lay out a financial plan to find out what it would take to support your children and yourself while sort of maintaining the life style you are used to. Consult a financial planner, if needed. Once you know how much you will need to be financially secure, make sure you will get it in the divorce settlement.