Have you ever heard of the term ‘gray divorce’? It’s when you get a divorce later on in life. There has been an increase in divorce rates for women in their 50s since the 1990s. In fact, that rate has doubled.
But beyond gray divorce, what women are learning the hard way, is how to manage their finances at such a late stage in life.
Many of these women would have taken a backseat in financial planning for the family, and allowed their husbands to do so.
As a result, many women are financially illiterate when they come out of their marriage. Often, they are left with very nasty “surprises”.
A majority of married women, a whopping 56% still leave major investing and financial planning decisions to their spouse, according to a report, “Own Your Worth,” released by UBS Global Wealth Management.
Out of that, 61% of millennial women said they leave investment decisions to their husbands. As millennial women ourselves, it can be hard to believe that women our age still leave such decisions to our partners, but this is a startling statistic we cannot ignore.
(Hint: It’s time to start learning how to become more financially savvy!)
For those widowed and divorced, it is reported that over half (59%) regret not taking part in long-term financial planning.
Almost all who are currently still married (85%) said their spouse knows more about financial issues than they do.
How money ties in with marriage and gray divorce
Money, whether we like it or not, is a major part of marriages. Many marriages break down because of money.
In the same survey on managing finances, interestingly, 80% of women said they were content with how financial responsibilities were split in their marriage.
However, since the survey only targeted women, we wouldn’t know how the men feel about their financial responsibilities!
The survey also highlights how little women knew about finances in their marriage while they were married. 56% of divorcees and widows discovered many things about the household finances during the divorce proceedings.
Some women discovered 401(k) retirement saving plans they didn’t know existed, while others were not so lucky and found more liabilities.
Among the most common negative surprises were hidden spending, hidden debt and hidden accounts. The worst discovery to have found was an outdated will.
In hindsight, the survey found that 94% of widows and divorcees would insist on complete financial transparency with their spouse. (Hmm, a little too late, isn’t it?)
So here’s what we would suggest for those still happily in their marriages to ensure transparency:
1. Start a discussion with your spouse on household finances
It may not be an easy topic to bring up, but it is one that should be brought up as early on in the marriage as possible. Outline all debts, expenses and savings to understand where both of you stand financially.
If you’re in debt, find a way to sort out your finances together so the burden is not too heavy on either party. Women, we did not fight so long for equality for nothing!
2. Start keeping track of family expenses
A small bottle of wine here and there, a new TV when there’s a sale perhaps, a new potted plant in the house… these may all seem like small expenses but if there is any spending done, there should be transparency.
Both you and your spouse should agree on how much should be spent when it comes to the household every month, and set aside a budget for it.
3. Come to a compromise on spending
Whether or not you’re in a single or dual income household, there should always be a compromise. If your husband is a huge fan of art, and is the sole breadwinner, it doesn’t mean that he should buy expensive pieces of art without consulting you.
A relationship requires compromise on everything, including spending.
4. Keep each other in the loop when it comes to big financial decisions
Planning to take a holiday somewhere far away or buy a new car? These are big-ticket items that need to be discussed by the both of you.
What do you think these women should have done to learn about their finances before the unfortunate ‘gray divorce’? Let us know in the comments.
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