The Five Mistakes Married Women Make

I wanted to write this post to warn women not to make the financial mistakes noted in this article from Smart Money. I hope to do just that, but I'll also add in a bit of commentary that some of you may or may not appreciate.

The piece starts off with a story:

Anne Borden, mother of two, wasn't particularly concerned in 1999 when her husband suggested she become the family's sole breadwinner. As a corporate executive, she earned a salary of $200,000-plus — more than enough for the Seattle-based family to live on comfortably. There was more money: Her husband of four years had just cashed in several million dollars worth of Microsoft stock options. That windfall would go into savings, they decided, and the family would live off of Borden's paychecks.

Soon thereafter, a red flag appeared: Borden discovered that her husband had deposited the options proceeds into four bank accounts, only one of which shared her name. When she questioned him about it, he said he would change the single accounts to joint ones when he had the chance. He never did.

In 2002, the couple separated. It was only then that Borden (who asked that we not use her real name for privacy concerns) took a good look at the finances and realized she had very little money of her own. Turns out she didn't even have a claim on the proceeds from the stock options. According to the divorce settlement, 80% of the stock options were considered her husband's individual assets rather than joint property because he had received the grant from Microsoft one month before their wedding.

The couple's divorce was finalized in 2004. Borden left her job in October 2002. Now, she worries about her relatively small retirement account and lack of other savings. "Had I known that money wasn't community property, I would have never let him stay home with the kids and live entirely off of my income," she says. Borden blames herself for not understanding the family finances and letting her ex-husband call the financial shots.

Here are my thoughts:

1. She got ripped off. No two ways about it. her husband was a sleaze and seems to have planned this from the time the options were issued.

2. That said, what's she griping about? She makes $200k per year for goodness sake -- she can't live on this? How many people in America would trade positions with her? (I'd guess about 99.6%.) Sheeesh! Can't Smart Money come up with a better example than this?

3. Someone's paying her $200k per year and she doesn't understand finances and turns it all over to her husband? Does this not compute for anyone other than me?

Ok, before I get a bunch of hate comments -- re-read #1 again. Even though she makes a ton and was a financial moran, the fact is that her husband still ripped her off.

Unfortunately, this problem confronts many women:

It's a common theme among many women. "The single biggest mistake I see women make is that they acquiesce [the financial decision making] to their spouses," says Stewart Welch, author of "The Ten Minute Guide to Personal Finance for Newlyweds" and a certified financial planner based in Birmingham, Ala. "Once they're out of the loop, they remain uninvolved forever." When one spouse controls the purse strings, the other spouse can be left in a vulnerable position when the marriage ends.

This isn't purely a women's issue, of course. Men can just as easily fall into the same traps. But women are more likely to give up careers to raise children, and are more likely to outlive their husbands, says Steven Kaye, a certified financial planner (CFP) based in Watchung, N.J.

Given this state of things, Smart Money offers five common financial mistakes married women make and gives some advice on how to avoid them:

1. Mistake: Handing Over the Purse Strings -- Solution: Pay Attention to the Household Finances

2. Mistake: Losing Your (Financial) Identity -- Solution: Maintain Some Individual Accounts

3. Mistake: Walking Away From Your Career -- Solution: Keep Your Skills Fresh

4. Mistake: Not Saving for Retirement -- Solution: Penny-Pinch Now for Your Future

5. Mistake: Asking for the House During a Divorce -- Solution: Get Financial Guidance

Good advice overall. And this has meaning even for happily married people. Both partners need to know what's going on in the family finances and be ready to go it on their own in case something other than a divorce (like death) should separate them.

Comments

[alias name]

It's hard to feel sympathetic here.

If the guy's options were 80% vested prior to marriage then they should be his assets without him playing any games.

I don't think the guy ripped her off. Maybe he was shrewd but, hey it was his millions not hers.

Hopefully she works on her communication skills because she got blindsided in many ways and seems to have the "victim" mentality. She had 5 years to get the option money in a joint account. We are talking about millions here...

I meet with divorcing clients frequently and this type of stuff is the norm.