Women and Divorce: How to Protect Yourself Financially

Women can make a few easy excuses as to why they are often the ones who end up leaving the financial responsibilities of their marriage to their spouses: “He knows more about money than I do.” “He’s the breadwinner, so it makes more sense.” “We split up duties, and that’s one of his.”

Unfortunately, this opting-out of a marriage’s money matters leaves women especially financially vulnerable when the marriage fails.

To complicate matters, starting over after divorce in this economic climate presents some unique challenges. For example, it is much more difficult today to qualify for an automobile loan, refinance a mortgage, and build (or re-build) a low credit score that has been damaged by excessive debt. Altogether, these issues can create significant obstacles to women when trying to separate from their husbands, protect their assets, and determine how property should be equitably distributed.

Whether we like it or not, money is inextricably linked to both marriage and divorce, and the financial complications of a marriage can last long after the conclusion of the divorce. So whether you are just getting married, preparing for an impending divorce or just want to take the smart precautions in case life doesn’t work out the way you had planned, here are two key ways to ensure that you can protect yourself financially:

Give Yourself Some Credit

In this economy, good credit is essential. You cannot qualify for a mortgage, finance a car, or even rent an apartment without good credit – all of which are things you may need to do upon divorce. Sometimes having access to credit can be a saving grace, as long as it is used responsibly.

There are many ways to establish and maintain good credit, and it is important to have it so that it is available in the event you ever need it. You should understand what the credit bureaus look for and what kind of financial activity will positively and/or negatively impact your credit. For example, it might be a good practice to buy something on the card each month, such as a tank of gas or your groceries, and make sure it is paid off. This helps keep your credit line in tact in case you ever need it for an emergency.

You should also regularly pull your credit report, which is available online for free once per calendar year. It is also a good idea to pull and keep a copy of your spouse’s credit report so that you can keep yourself apprised of what debts are out there that could impact your household finances.

Know Your Finances

The biggest problem I see with divorcing couples is when the parties only use one checking account, whether the account is held in joint names or in the individual name of only one spouse. This is especially a problem because a divorcing husband could remove all of the funds from the account or takes the wife’s name off the account, leaving the wife with no access to marital funds.

At a minimum, you should always know where your bank account is held and how to access it. You should have a checkbook, debit card and online passwords with answers to the security questions for the account. You should also have at least a small checking account in your individual name (or a savings account on which you can write checks) to access in the event of an emergency. This way, if you notice funds disappearing from the household checking account, you can transfer funds to your individual account for safekeeping.

If you are preparing for divorce or know that divorce is imminent, you can begin building an emergency fund in an individual account so that you have it “just in case.”