It’s common for women to be devastated by the loss of their husband or the end of their marriage. While the emotional impact of no longer having their lifelong mate is difficult enough, their mental anguish is often exacerbated by fear and the stress of the financial unknown.
Kiplinger’s recent article,“3 Things Married Women Need to Know About Their Money,” explains that the women who struggle the most right away, usually haven’t been involved in their family finances. As a result, they don’t know how much they have available to live on for the rest of their lives. When they know the amount, they may not have the confidence to know whether it’s enough. In fact, according to a recent Gender Gap in Financial Literacy study, “the reality is that 90% of women will be solely responsible for their finances at some point in their lives, due to the death of a spouse or divorce.”
Women must have a basic knowledge of how much they have and how it is allocated. A 2014 study by Prudential found that 27% of married women say they “take control” of financial and retirement planning and manage it themselves. That means that 73% of married women do not. With this gap in knowledge, here are the three basic financial measures that all married women should know about their money:
- Research Your Annual Household Income. Determine how much you and your husband earn together. Review your income from investment accounts, jobs, rental real estate, pensions, Social Security and business investments. If there’s a divorce, the lists of assets and income are an important part of the property settlement. Review your tax returns from the past two years and keep a copy of each tax return going forward.
- Understand Your Assets and Debts. At least once a year, make a list of everything you own. Don’t forget checking and savings accounts, 401(k) retirement plans, life insurance and real estate. It’s important to know your net worth, so next to each asset, make a note about any corresponding loans. An annual review also helps make sure couples don’t forget about any investments they may have made years ago, like a stock that may not be performing well. It is also important to determine ownership in each asset. This will be important, if your spouse passes away and could affect the income tax you pay each year.
- Do You Have an Estate Plan? If you and your spouse don’t have a will, talk to a qualified estate planning attorney and bring the household balance sheet to the meeting. If you’ve made a will, review it and make certain you know which assets you’ll inherit if your husband passes away. You should also determine how much income will be available from life insurance and other sources to support you for the rest of your life. If your attorney only provides an electronic copy of the will, print out a copy and keep it in a safe and accessible spot.
Women with knowledge of their household income and assets, and those with a will, can minimize some stress and surprises, if their spouse passes away or their marital situation changes. It’s difficult enough dealing with the loss of a spouse, so prepare now to make certain you have the financial knowledge to handle any unforeseen events.The best way to do that is to put a proper plan in place, to make sure that what will already be a difficult time is not made any harder. Call Rowley Law today to set up a consultation to make sure you have the best plan in place.
Reference: Kiplinger (March 13, 2018) “3 Things Married Women Need to Know About Their Money”