A Woman’s Guide to Investing–Part II

woman who does not work outside the home can still save for her own retirement through a spousal IRA, for example.

DIVORCED

Sandra Heading-Marchand found herself in the same predicament as many divorced women: She suddenly had more expenses but less income from which to pay them. “My ex-husband had the income coming in. I stayed home; I was trying to develop a home-based business as an art designer. He would put money into my account, and I would handle the household bills.” After divorcing her husband three years ago, the 55-year-old had to figure out another plan.

Unlike many married women, Heading-Marchand took on the primary role in managing the couple’s finances. She was responsible for paying all the bills and balancing the checkbook. Though he provided the money, her husband took a more passive role.

Now that Heading-Marchand was on her own, she worked on building up her business so that she could generate enough income to live on. Until then, she made ends meet by taking on two jobs: one as a jewelry designer and another as a designer at a fashion house. “I stuck to a budget and it was working, but after the divorce all of the money coming in went to bills. I didn’t have any extra money. Everything went to property taxes, utilities, and maintenance on the house.”

Today, Heading-Marchand has regained her footing. She knows that life is full of unexpected surprises, so she began to ramp up her savings.  She now has about $5,500 socked away.

Dividing it Up
“Divorced women are the worst off financially,” says WIFE’s Bahr, who specializes in the financial issues of divorce. “Oftentimes in divorce, a couple is dividing up debt, and then women are trying to dig themselves out of a hole.”

The first step in the divorce process is to understand what you’re dividing up. “Women need a total understanding of their finances and their financial documents,” advises Stanny, who has been through two divorces. She advises women to talk to an accountant as well as a divorce lawyer and an estate lawyer.

Taking Care of You
Women often fight for the house because they think keeping it will be better for their children’s emotional state. But that might not be the best financial move, says Hounsell. “Within a year they can’t afford to keep the house up anyway,” she says. In fighting for the house, many women fail to negotiate a divorce settlement in their own best interest. That means you must think carefully about waiving your rights, such as for alimony. Though increasingly rare, alimony might still get awarded for marriages of 10 years or longer, especially if your spouse earns significantly more than you do. You will not have another opportunity to renegotiate it once the divorce decree is signed, so think hard about it. If your spouse has retirement savings or a pension, by law you might be due half. You may even be able to withdraw this amount without incurring the 10% penalty on

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