They say about half of all marriages end up in divorce. In Canada, it’s around 48%. In the U.S., it’s around 53% according to Stats Canada. You’ve probably heard these stats before.
But what happens when a couple splits and all the financial matters were being handled by just one spouse? In most cases (but not all), it’s the woman who is left with no knowledge of money matters. Over the years, I’ve seen hundreds of marital splits and in an overwhelming majority of cases, the woman is left in the dark when it comes to finances (that trend is changing as today’s women are becoming more financially astute.. good for them.. let’s continue that trend).
There is HOPE and HELP. Here are some things you can do to take charge of your finances before or after a marital split:
- SEPARATE YOUR BANK ACCOUNTS.. It’s estimated that 64% of couples pool funds, and only 14% keep separate accounts. You should keep a joint account to shared expenses and a separate account for your own personal spending and saving. This will help both spouses track and manage their spending habits.
- TIL DEBTS DUE US PART. Debt is a major reason for marital splits. Let’s face it, once you get married, the debts become a shared responsibility (maybe not legally.. i’m referring to practical matters now). Get together with your spouse and make a plan to retire those debts. The sooner you eliminate pre-marriage debts, the less chance of future arguments.
- SHARE INCOME INFO. One of biggest concerns is disclosure. Has all income being disclosed to each other? Each year, when income taxes are filed, both spouses should be present and review each other’s tax returns. Take the mystery and guessing if incomes out of the equation.
- SHARE ASSET INFO. Any investment or bank account statements should be reviewed shared regularly.. at least annually, but preferable semi-annually. This will help you track investment performance and allow both spouses the opportunity to watch their wealth. Fewer secrets is best for all.
- MAIN INCOME EARNER PAYS PARTNER AN ALLOWANCE. Doing this will empower the receiver to manage their finances. It gives them financial responsibility. And should a marital split occur in the future, then finances can easily be tracked back and fewer money arguments will ensue.
- SPEAK WITH YOUR OWN FINANCIAL ADVISOR, MORTGAGE BROKER, INSURANCE BROKER, LAWYER, etc…I can’t stress this point enough. Get independent, unbiased advice. Someone that doesn’t know your spouse. It’s about ‘no potential conflict’. Take no chances. You’ll never second guess if your advisor had your best interests at heart.
The last tip is so crucial. I’ve seen many examples where an advisor was buddy buddy with one spouse and then did not give the other spouse the best advice (unintentionally or intentional). Just avoid this altogether and speak with someone else first. If you really want to use that original advisor, go back and test out their advice.. At least you’ll have done a comparison…
And if you have a question or just want some advice, please feel free to contact me. I’m happy to share my opinion or offer any assistance.
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
Steve Garganis 416 224 0114 email@example.com
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.