For some, a divorce means freedom. For others, it is a loss. Since the 1990s, the divorce rate for people in their 50s has nearly doubled. For women especially, a divorce means learning how to make large economic decisions that their husbands dealt with during their marriage.
UBS Global Wealth Management released a report, “Own Your Worth.” In that report, UBS surveyed more than 600 women who have either been divorced or widowed within the last five (5) years and over 1,500 couples. Further, all participants had at least $250,000 in investable assets. Out of all the people surveyed, approximately 56 percent of married women said they still leave important investing and financial planning decisions to their spouse. Sixty-one percent (61%) of millennial women say they are content with their husbands making all investment decisions, while only fifty-four percent (54%) of baby boomers agree.
The report revealed that there are vast differences in attitudes between married women and divorced or widowed women regarding managing finances in a relationship. Fifty-nine percent (59%) of divorcees and widowers regret not taking part in the long-term economic planning while they were married. Meanwhile, eighty-five percent (85%) of married women stay out of making long-term financial decisions because they believe their spouse knows more.
Perhaps the significant disparity between attitudes when it comes to managing finances is because fifty-six percent (56%) of divorcees admit that they encountered many financial “surprises” during their divorce action. Often these financial “surprises” resulted in the uncovering of hidden debt, lack of savings, or aggressive investing that threatened retirement goals. Others were pleasantly surprised with the discovery of a 401(k) or other retirement savings plan.
Paula Polito, chief strategy officer for UBS Global Wealth Management, says that “[d]espite all the strides that women have made, they are still abdicating important financial decisions that will profoundly affect their future. Women and divorcees who find themselves alone wish they had been more involved in finances while they were married. Nearly all of them advise other women to get more involved early on and break the cycle of financial abdication.”
After years of abstaining from financial decision-making, divorcees and widowers are taking their own advice when entering a new relationship. Eight (8) out of ten (10) divorcees and widowers report they have taken on a more active role in financial planning and decision-making. This is excellent news, as women should be more involved in their finances to avoid any financial “surprises” later on.
All women, whether you are entering a new relationship or have been married for years, should educate themselves and taken an active role in their finances. This does not mean you have to be a financial expert, but you should be involved and aware of the assets and debts you have.