How Women Can Keep From Making Themselves Victims in Divorce

Regardless of their post-divorce earnings picture, many women make self-defeating decisions regarding their property settlements. A prime example of this is the common fixation on trying to get the house. They think of how their children used the swing set in the backyard, and irrationally connect motherhood with getting the house. Emotionally tied to their homes, they don’t consider a host of important financial factors.

When a couple divorces, one household becomes two. This is expensive. Critical questions include:

  • Can you and your husband afford not to sell the house? Do you have enough other assets that one partner can be fairly compensated for the equity in the home? This assumes that there is substantial equity which, given the prevalence of outsized mortgages, often isn’t the case.
  • Assuming that there are enough other assets, can you afford to own the house – not just initially, but down the road? Will your post-divorce income be enough to pay the mortgage each month?
  • Can you afford the upkeep costs – energy bills, repairs, renovations, yard maintenance among them – that would be far lower with a smaller, less expensive home or a townhouse or condominium?
Typically, women are advised on such matters by divorce attorneys who, instead of looking at long-term financial-planning impacts, simplistically view property settlements as a snapshot of present-day value. As a result, many women fail to realize that getting the house might imperil their ultimate security because the financial burden of the house may severely limit their ability to set aside money for retirement. Depending on their age at the time of divorce, retirement may be the last thing on their minds.

Instead of getting the house, perhaps it would be better to get a fair share of the liquid assets (which may include money from the sale of the house), plus money for job-training or additional education.

The goal of post-divorce life should be financial independence and self-reliance. Finding a man with money after divorce isn’t independence; it’s dependence. As is the case when you’re married, a man is not the answer to your financial situation.

Often, the die is cast for becoming a financial victim of divorce during the marriage. The way to avert this fate is to claim your financial power and to use it to make beneficial decisions during – and, if you get divorced, after – your marriage. Claiming this power is an uphill battle when you’re divorcing, but it’s all the more necessary then.

Any opinions expressed here are solely those of the author.

Laura Mattia is a partner with Baron Financial Group, and a fee-only financial advisor. She's a Certified Financial Planner professional (CFP®), a Chartered Retirement Plan Specialist (CRPS®) and a Certified Divorce Financial Analyst (CDFA™) and holds an M.B.A. in accounting/finance. Her Internet radio show is Financially Empowering Women™ with Laura Mattia. A former professor at the Rutgers University Business School, Mattia is completing a Ph.D. in financial planning from Texas Tech University; her dissertation is on how to help women plan for retirement.

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