Yahoo Finance 5 Things All Married Women Need To Do with Their Money
Getting married is exciting, but this new status can change many aspects of your finances. Whether it’s about taxes, getting a prenup or how to split bills and debt, there is a lot to think about and some pitfalls to avoid.
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“Research has consistently shown that money causes more financial stress among women compared to men and that women report feeling less financially secure,” said Tina DeGustino, consumer strategy expert at BMO.
DeGustino cited a BMO Real Financial Progress Index released earlier this year, which showed that only 68% of women than men say they share financial responsibilities with their partners, and 50% of women share managing day-to-day finances, such as paying bills.
“With that in mind — and despite women making recent strides in pay, education and in the workplace — the findings underscore the ongoing challenges they face in achieving financial security and long-term wealth,” DeGustino said. “But there are several steps married women can take now to take control of their money and make real financial progress.”
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Know What You Have and How To Access It
The most important thing married women should do with their money is know exactly what they have, where it is and how to access it, said Bobbi Rebell, certified financial planner (CFP), founder of Financial Wellness Strategies and author of “Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Be Everyday Money Smart.”
“Too often, once a woman gets married, she takes a step back from her financial involvement and allows her partner to take over,” Rebell said. “They equate asking questions about money with being perceived as not trusting their partner. It is hard but important to insist on financial transparency.”
Yet, she said that there are questions and potential scenarios to think about.
“What if something happened to your husband? Are you ready, willing and truly able to step up and take over? Staying informed and aware of everything related to your finances is the most responsible thing you can do as a partner,” Rebell said.
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Understand Your Taxes
Another important step married women should take is understanding how their taxes are filed so that they can adjust their withholding.
“For example, if they file jointly or married filing separately — so they can adjust their W4,” Rebell said. “On that note, they should make sure to read all their tax documents before they sign them.”
As she explained, even an innocent error on a tax form you sign could put you in trouble — and many spouses have had trouble because they sign tax documents without really understanding what they are signing.
“If it is your signature, you are responsible,” she said.
Invest in and Plan For Yourself
BMO’s DeGustino also emphasized that as women tend to outlive men, it is key for you and your partner to have life insurance and a will.
“It’s important to consider saving money for your own retirement, longer-term care and simply to have an emergency fund for unexpected occurrences,” she said.
For instance, DeGustino said that it’s critical to have a safety net of eight months of expenses when fiscally possible to protect one’s financial progress.
If you don’t already have one, open a bank account and credit card in your name — and keep it in good standing to ensure you have a solid credit score, she said
“It’s also crucial to have a credit monitoring service with your bank or a third-party provider to build, fix or track your credit standing so it is in an optimal state if and when needed,” DeGustino said.
Consider a Postnup
Much has been said about prenups, but some experts said that if you are married and are wondering whether you should take further steps to protect your finances, you may also want to consider a postnuptial agreement.
“A postnuptial agreement is a contract similar to a prenup, but it is drawn up only after marriage,” said Jamie Berger, matrimonial and family law attorney at Jacobs Berger.
Berger said that while both agreements ensure that spouses have a say in how their assets will be distributed in the event of a divorce, a postnuptial agreement has no deadline; couples can draft a postnup as soon as one week or several years after their wedding.
Whether you came into a marriage with money or you acquired it along the way, drafting a postnuptial agreement is a good way to start (or continue) a conversation about what matters to you and your partner and what would feel fair in the event of divorce, Berger said.
“Remember, planning for the ‘if’ does not make it any more likely that your marriage will fail,” she said. “Having these conversations actually provides you and your spouse with a certain peace of mind that you have thought through your finances and how you will address issues in your divorce should it come to be.”
Create a Retirement Fund Early on in Your Career
Another crucial aspect to consider is planning for retirement and according to Berger, personal retirement savings empower women to maintain their lifestyle, cover long-term expenses and more throughout their later years.
“Whether you opt for an employer-provided 401(k) or start a fund on your own, establish an account and start building this fund as soon as you can,” she said — noting that in the event you get divorced and lose your partner’s income, the quality of life you planned for your retirement is bound to change.
“Set this up as early as you can to set yourself up for success in the long run,” she said.
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This article originally appeared on GOBankingRates.com: 5 Things All Married Women Need To Do with Their Money
