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Married women in two-income households face the highest risk of financial instability in retirement, according to a report from the National Retirement Risk Index by Prudential.
This is because two-income households tend to spend more on monthly expenses, such as a mortgage and vehicles, because they can afford to when sharing bills. However, in the event of a divorce or the death of one spouse, the other would be left with expenses above their income.
Below, three women who faced economic hardship after divorce share the biggest financial mistakes they made while married and what they did to rebuild their wealth.
Mari Adam and her husband didn’t share the same values, even though they shared an account
Mari Adam is now a certified financial planner. But when she got married at 26, she didn’t know as much about money as she does today. She learned too late in her marriage how important it is to have shared values about money, parenting, and lifestyle before tying the knot.
Adam and her husband both had funds in their own names, but also had a significant amount of money in a shared investment account that was often spent by one partner without notifying the other. Their different spending values eventually ended the marriage after 18 years. After her divorce, Adam was able to get back on track and build a stable financial future by being responsible for her spending habits.
“My advice to younger women: Make sure you share values and are on the same page before you get married or make a commitment,” Adam told Insider. “Oh, and make sure you separate money into ‘yours, mine, and ours’ so you always have your own resources to fall back on.”
Josephine Lee didn’t trust her own financial instincts
“My biggest financially unsmart move was falling into the traditional thought, thinking my husband knew best on how to handle finances,” Josephine Lee told Insider. “I, as his wife, would just follow his lead. I doubted my financial instincts and capabilities. I thought he would know best how to take care of the family financially.”
Lee didn’t just ignore her instincts but neglected her own needs. She brought home a paycheck but didn’t consider the things she wanted as part of the monthly budget. When she got divorced, she walked away with $145,000 of debt from student loans, a car loan, and a mortgage. She also became a single mother.
It was only through trusting herself and making smart financial decisions that she was she able to pay off the debt within five years of her divorce. She then started focusing on building wealth by maxing out her 401(k) and contributing to other tax-advantaged employer-sponsored accounts. The process wasn’t easy; in the beginning, Lee had to move back in with her parents and use budgeting apps to pay …read more
Source:: Businessinsider – Life
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