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.

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