I don’t know which pains me more – seeing how far I’m behind with my retirement savings or hearing horror stories from women who are divorcing who are financially destroyed because of something their husbands did.
One woman will owe the IRS for the next decade trying to pay off the back taxes her husband piled up and another friend of mine has zero credit because of a bankruptcy and foreclosure her husband caused before she realized he really wasn’t earning any money just pretending to run a business.
Here are the top financial mistakes married and single women make and what to do instead.
Financial Mistakes Married Women Make
1. Turning over all financial power to your husband.
Remain the CFO of the money even if you’re not the one earning it. Know what’s coming in and going out less you be blindsided later.
2. Having joint accounts and credit cards.
Keep a separate checking account and credit card and a small amount in a joint account for expenses you share. Don’t subject yourself to your spouse bad spending habits or be caught with a drained checking account if they leave you.
3. Giving up your potential to make money.
Think twice about leaving your career to raise children and how long you’ll be out of the workforce. The longer you’re out the harder to get back in and land a job. Whenever you’re not the breadwinner or a breadwinner, you put yourself at risk. Some ideas to make all the money you need.
4. Not knowing your property rights.
Transferring title to real estate owned before you got married into joint names is only good if the marriage last until you die and you know you want it all in an estate. However, it’s cleaner and wiser to keep property (cars, homes, investment properties) prior to the marriage separate, according to Alex Kindler, a CPA at Horovitrz, Rudoy & Roteman in Pittsburgh, PA. And the same holds true for investments.
Financial Mistakes Single Women Make
1. Not having any financial goals.
Do you know your number? How much you need saved to live once retired? A million dollars would provide you $40,000 a year if you pulled 4% out each year, plus your social security. Are you on track to save a million, two million? Quit investing in shoes or vacations, until you have this equation figured out and mapped into your future.
2. Assuming Your Current Status is Forever
Life is filled with changes, don’t you know it sister. What is you financial plan is you loss your job or get hurt or sick? Do you have six months of living expenses saved? Your credit cards paid down to zero balance? Disability insurance and such?
3. Waiting to Save Money
Set up an auto deduct today that goes directly into your savings your 401K. Once it’s set up you won’t miss it and will be a wiser Mona for doing so.
4. Living on Credit
This is too easy to fall into in today’s paycheck-to-paycheck world and economy. If you’re carrying a balance, make it your #1 goal to pay off all credit card debt and to keep it that way. Listen to Dave Ramsey daily and get his Gazelle Online Budget tool. Tune into Suze Orman and get Suze’s budget calculator. Whatever it takes to keep you on track.
I’ve started paying with my debit card instead to keep my spending on a cash only basis. It’s easier than sit ups. Give it a go.
Life isn’t always fair. Women live longer and make less than men (presently). Don’t sleepwalk into pension poverty or fall into the pocket of the 20% of women who will live in poverty during retirement. That would not be a storybook ending.
How are you feeling about your retirement?
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Category: Career & Money