The Biggest Financial Risk a Woman Can Take is Getting Married
Many of us will take several financial risks in our lifetimes, but for women, getting married may be the biggest financial risk of all.
Why is this?
According to a Pew Research Center study, men are primarily viewed as the financial providers in relationships. Solely depending on someone for something this important is very risky because there is simply no telling what the future holds.
Nobody ever plans on getting divorced, nor do they like to think about their spouse getting too sick to work or passing away before they do. Alas, these things do happen. Although there’s no way to prepare how these tragic life events can take their toll emotionally, one thing that women can be in control of is how their finances are affected.
To ensure you’re not taking a huge financial risk just by getting married, be sure to:
Be involved in the finances
Once you get married, you may find yourself juggling many day-to-day tasks that keep you extremely busy, especially if you have kids. As such, it can be tempting to let your husband take over any duties that he’s willing to. Many husbands handle the spending, investments, and other important financial aspects of a marriage, and their wives just put their trust in them without knowing exactly what’s going on. In the event of your spouse’s death or a divorce, this can backfire significantly.
To avoid being caught off-guard financially, you want to be sure you’re equally as involved in everything money-related. From the beginning of your marriage, be sure to stay involved with any long-term financial planning, important money decisions, and even the everyday spending. Keep track of all expenses, debts, assets, investments, and all financial accounts.
Think about premarital agreements
If you’re bringing any assets into the marriage, insist on a prenuptial agreement to protect those assets. It may not be the most romantic thing to bring up to your soon-to-be spouse, but having a prenuptial agreement can help you maintain some level of financial independence should you two ever split.
Have serious money talks
Before you two say “I do,” it’s important to sit down and have a serious talk about money to ensure you’re both on the same page financially. You may discover, for example, that you’re marrying a big spender. If plan on opening up loans and credit cards together, remember that that debt can be your burden as well if you divorce.
Try to come to an agreement regarding spending habits, debt, savings, investments, and other important financial issues. Again, this may not seem like a romantic thing to discuss in between wedding and honeymoon planning, but it’s crucial. According to an American Express survey, only 43 percent of the general population discusses finances before marriage. With the leading cause of marital arguments being money—70 percent according to a MONEY survey—it clearly demonstrates the importance of having these talks: not just before marriage, but frequently during your marriage as well. In fact, because your finances are likely to change as time passes, you may even want to set aside monthly dates to have these money talks.
Not all married couples equally share their money, and that’s okay. If you’re compatible on every other level, but simply can’t get on the same page financially, it’s a good reason to consider keeping your finances separate.
Think twice before giving up your career
Everyone has their own reason for giving up their career and allowing their spouse to be the sole breadwinner. If you have a job you love and that you thrive in, carefully consider if this decision is really the right one for you. Even if you’re certain it is (for example, you want to take time off to be a stay-at-home mom), explore the other ways you can still make some extra cash and maintain your financial independence.
Let’s say, for example, you’re giving up your full-time job. Depending on the industry you worked in, perhaps you can take on a part-time role or even freelance occasionally. This allows you to still make money, while also staying connected to a network that’s related to the industry you enjoy and you’re familiar with.
Make an estate plan
It’s an uncomfortable subject for many, but it needs to be done. Ensure that your wishes are carried out at the time of your death by creating an estate plan and revising it as needed. If you and your spouse end up divorcing many years from now, for example, but you pass away before the divorce finalizes, he may inherit certain assets that you didn’t want him to. This is especially important if you have children. Create your estate plan even before you get married, and be sure to update it regularly as your life inevitably changes.
Reach out to a financial planning professional
Hiring a financial planner who is experienced in premarital financial planning can be one of the best money decisions you make before tying the knot. By laying the right groundwork in the beginning and planning accordingly, you can potentially avoid a huge mess many years from now.
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