Friday, February 27, 2015

How Women Can Recover Financially After a Relationship Ends


When a cohabiting relationship either married or unmarried ends it is one of the worst experiences you will ever have.  Financial hardship is often one of the most significant challenges when a relationship ends.

A woman earns $.77 for every dollar a man earns. When a father separates from the mother of his children, his available income increases by approximately 1/3. The average mother’s available income decreases by more than 1/5 and remains that way for many years.

Debt after a relationship ends can have significant impacts for women by leaving them with bad credit, paying off debts, decreased income, bankruptcy or homelessness.

Women should seek legal guidance on how to get back on track financially when a relationship ends. If you cannot afford to hire an attorney look for free legal services in your city.

Moving on after a relationship ends is much harder for women and men who remain connected via child support, alimony or shared custody of children. If can be difficult to get closure when you have to remain in contact in-person, verbally or financially.

Women who recover successfully are those who comes to terms that the relationship has ended and their lifestyle has changed. Through time, healing, and a strong support network they are able to establish a new identity and become committed to their new lifestyle. They do not rely on their ex for happiness, fulfillment, as a problem solver or for long-time financial support. They find other ways to increase their income long-term. Here are 13 ways women can recover when a relationship ends.

  1. Support. Develop a strong network of family and friends to provide support when needed.
  2. Education. Educate yourself about financial planning by reading a book, articles or magazines, attending a seminar, or watching a video or television show.  Hire a financial professional that is fee only or charges by the hour to help you review your current financial status and map out a plan for retirement and other financial goals.
  3. Assets. Move all of your financial accounts to another bank or financial institution such as bank accounts, retirement accounts, direct deposit, etc. If you have any joint accounts withdraw the portion of the money that is yours. Open an individual savings account and open a checking account with overdraft protection to prevent bounced checks if you do not have an account in your name only. Determine how assets with your ex will be divided including cash accounts such as checking and savings accounts, and investments.
  4. Documents. Make copies of all of your financial documents, warranties and policies, and keep originals of your birth certificate, marriage license, divorce paperwork, etc. Make a list of all of your new bank account information and passwords and store in a secure location preferably outside of your home if you are still living with your ex.
  5. Credit. If you do not have at least a 700 credit score work to pay down debt and pay off any old accounts to help increase your credit score. Keep credit card balances at 20% or less of the credit limit. If you have bad credit open a secured credit card or work with your local bank or credit union who may have programs to help customers with bad credit. Open one new credit card account in your name to establish credit history if you do not have any credit. Place a security alert on your Equifax, Experian and TransUnion credit reports to prevent your ex from opening an account in your name.
  6. Joint accounts. Pay down debt on any joint accounts and remove your name from the account once the debt is paid. Close any joint accounts and cancel the card. Remove your name as authorized user from all applicable accounts.
  7. Budget. Develop a budget or spending plan. Subtract your entire total monthly expenses including debt and from your total monthly income after taxes. If there is no money left over then you need to adjust your spending.
  8. Distribution. Make sure both of you are clear who now owns the house, assets or other jointly owned assets.
  9. Support. If you are entitled to child support or alimony get it and ask for a yearly increase.
  10. Laws. Know the laws in your state regarding divorce, common law marriage and debt.
  11. Insurance. Buy auto, health, homeowners, life, disability and long-term care insurance in your name only. At a minimum have adequate auto, health, homeowners and life insurance.
  12. Review. Review paperwork yearly to ensure your beneficiary information is up-to-date.  Create a will. Research eligibility for receiving benefits from your ex-spouses’ pension or retirement plan.
  13. Retirement. Open a retirement account in your name only.

Monday, February 23, 2015

Why Most Americans Need Credit

You need a credit card or loan to generate a credit report and credit score. No credit no credit score, it’s just that simple. If you live a cash only lifestyle and don’t feel you will ever need to apply for a credit card or loan then you don’t have to worry about a credit score. However, most Americans at some point in their lifetime will need to apply for a credit card or loan at least one time.

If you have no credit it can be almost as difficult to get approved for credit as someone who has bad credit, however they are not the same. If you have no credit or bad credit try opening a department store credit card. Once approved and you have at least 6 months of good payment history you can apply for a bank credit card.

If you need to apply for a credit card, student loan, mortgage loan, personal loan, home equity loan or line or credit, car loan, business funding, refinance, consolidate loans, need any type of insurance, need a utility account, cable or internet service you will need a credit score of at least 650 to get approved or to get service from a service provider.

As credit card companies became more competitive they started to target consumers who were the most lucrative to them – essentially consumers who always carried a balance from month to month. Companies then began offering teaser interest rates, cash back, and other perks to retain consumers and attract new consumers.

Some credit card companies offer perks such as frequent flyer programs, discounts on products, rebates, cash back rewards, points and other perks. Credit card interest rates can range from 1% to 29%. Grace periods vary by company. Credit cards also come with lots of fees such as annual fees, late fees, over-the-limit fees, balance transfer fees, and more. Read the terms and conditions of the credit card including the dispute policy and fees charged. Don’t get tricked by the 10% off discount to open a credit card. Compare at least 4 different credit cards to see which has the best feature for you using sites like or Pay the balance in full every month.

You are not a good candidate for a credit card if:
  • You constantly pay late fees
  • You are a procrastinator
  • You are struggling to pay your current bills or living paycheck to paycheck
  • You are unemployed, underemployed or a college student
  • You don’t keep track of your spending or don’t have a budget
  • You are an impulse or emotional shopper or have a shopping addiction
  • You aren’t good with paying bills
  • You are already owe a lot of debt
  • You defaulted on your student loans or already have bad credit

Take advantage of credit card perks such as:

  • Return protection - if you are able to return a purchase your credit card may cover the cost of the item
  • Purchase protection - if your purchase is stolen or damaged you could be reimbursed for the cost of the item
  • Warranty extension - your warranty can be extended for up to a year
  • Rentals - covers damage or loss when you rent a car which is cheaper than the insurance coverage offered by rental car companies and can be used in addition to your car insurance coverage 
  • Shopping portals – most credit cards offer an online shopping portal which offer deals that earn higher amounts of rewards points or cash back
  • Traveling protection - some credit cards offer trip cancellation and trip interruption policies, lost or damaged luggage insurance, travel assistance hotlines, coordinate roadside automobile repairs or discounts on entertainment
  • Identity Theft - offer more protection that debit cards if your card is stolen or comprised. Visa and MasterCard have a zero liability policy that protects consumers and any credit card with the Visa logo but not all credit cards offer this protection.
  • Laws – consumers are protected under the Fair Credit Reporting Act, Fair Credit Billing Act and Fair Debt Collection Practices Act. 
  • Fees - some credit cards offer no annual fee or low fees.
  • Programs - rewards cards only work to your advantage if you pay the balance off in full each month.

However, I encourage you to reduce your dependence on credit cards as you pay off all of your debt and as your financial situation improves. Credit should be a secondary form of payment not a primary form of payment.