It is unfortunate but true, women are worse off financially after a divorce. As a finance writer, I have heard from many women over the years on how difficult it has been to recover financially after a divorce. Women have argued this for some time, and now recent statistics have verified what we know.
A new study has shown women's long-term finances are more affected after divorce than men. That’s not to say the men are not financially challenged; the reality is nobody wins in divorce.
A recent study led by the Australian Institute of Family Studies has shown divorced women found it difficult to recover financially and the effects last into old age. Women with dependent children found it particularly difficult to recover financially, due to problems balancing childcare and work, while women without dependent children financially recover after six years; those with young children find it harder.
When you consider all the costs associated with the divorce such as the legal costs, debts to be paid off and finalised and, most likely the family has to be sold and divided. Then, there are the associated costs with selling and buying and starting to refurnish a house all over again. Once you’re ready to set up house, you’ll be paying for all the bills yourself, electricity, rates, phone and groceries. No wonder a break up is so costly.
Divorce has a huge impact on finances for both men and women. These costs alone mean that some couples who want to separate cannot, because of the costs involved, making it difficult for both parties; emotionally and financially while they’re together.
The average age of woman who divorces is around 45 years old. Most married women in this group are rearing children. Some are stay at home mums, while others are working part-time or have full time jobs. More often than not the bulk of the responsibility of the children lay with the mother.
WHY WOMEN DON’T HAVE ENOUGH
Women on average earn twenty percent less than men do. This has to do with the fact they women will be out of the work force raising children and, also, there are not as many women in high paying roles as men. Take a look at the number of women on boards or in senior management, the numbers are just not there. When women take time away from the workforce to raise children, it can be very hard for these women to find work again. The time away means they’ve lost some of the skills and confidence. When they eventually find work, they experience difficulty combining paid work and family responsibilities, particularly if they have inadequate support.
Another issue of concern is that the banks are not so willing to lend to men or women, who have been out of the workforce and plan on starting up again in their late forties and fifties. Try getting a mortgage loan when you’re in late fifties and sixties when most loan durations are over 30 years. The banks aren’t going to lend money to someone who they don’t believe is going to be working for that long to pay off a mortgage.
Women are smart with money. It’s just in the past money issues were seen as men’s domain. Thankfully it’s shifting as more and more women find themselves on their own.
7 Rules – How to protect yourself financially.
- While you’re working put as much into your superannuation as possible.
- Have some investments that are solely yours – such as shares which you can sell should you need the money.
- Once you have taken time out from the raising children and you’re back into the workforce, start piling money into your superannuation and build up your reserves.
- Keep in touch with work colleagues and abreast of industry news.
- Keep up with technology and your work skills.
- If possible try to keep working, such as having a part-time job or have investments which generate income.
- Most importantly, don’t leave all the financial decisions to your partner. Both of you have the right to know where all your money goes. Do not hand the power over to another person.
Emily Chantiri is a journalist and author of the best seller, The Money Club and The Savvy Girls Money Book. www.emilychantiri.com.