Why You Need to “Plan Single”

In most long-term relationships, the partners divvy up the various responsibilities that go along with managing a household. Often, one person takes the lead on food shopping and cooking, while the other may manage the lion’s share of home maintenance and landscaping projects.

But when it comes to managing investments, it’s more common for men to take the lead and for women to be left in the dark as to how and where the couples’ assets are managed. If the couple divorces or the husband dies before his wife (as is often the case), that leaves the woman scrambling to figure out her finances. In fact, 90% of women will end up managing their own finances at some point during their life due to divorce, widowhood, or having never married at all.

But when it comes to managing investments, it’s more common for men to take the lead and for women to be left in the dark as to how and where the couples’ assets are managed.

According to a recent report from UBS AG, 74% of widowed and divorced women surveyed discovered “negative financial surprises after a divorce or death of their spouse.” The vast majority (76%) of these respondents “wish they had been more involved in long-term financial decisions while they were married, rather than trying to navigate them while coping with such significant life changes.”[1] That’s why every woman, whether married, in a serious relationship, or already single, should plan as if she will one day become single again or remain single.

It comes down to this basic fact for every woman: at some point during your life, if not your entire adulthood, you will be solely responsible for your finances. To ensure you have the knowledge and confidence you’ll need to remain financially independent now and throughout your retirement years, take ownership of your own financial future. Here are five easy steps to get started:

  • Build your financial confidence:   it takes some time, but rest assured, in time, you can become confident in your finances.   Start talking about money matters with those whose opinion you value, try reading financial section of newspapers, personal finance magazines, or reputable websites. Learn the basics of long-term investing, debt management, and retirement income planning.
  • Organize your documents. If you’re married, create a household financial inventory document with your spouse and update it every a year. This inventory should include the contact information for your advisors, bankers, lawyers, and accountants that would be needed should your circumstances change.
  • Communicate with your advisor. If you’re married and work with a financial advisor, make sure you and your spouse both meet with the advisor on a regular basis. Focus these meetings on planning and tracking progress towards your long-term goals, rather than going line by line through investment holdings. If you don’t have an advisor, discuss whether it makes sense to hire someone.
  • Establish your own credit history. If you don’t have credit cards or savings accounts in your own name, open accounts so that you’re credit history is not solely dependent on your spouse’s record.
  • Make your voice heard. Women tend to be more risk aware than men, while men tend to be comfortable taking riskier bets. Make sure you manage your investments in a way that reflects your own tolerance for risk.

Remember, only you can take charge of your finances and investments. Remaining a silent partner or leaving your financial future to your spouse may leave you with regrets later in life. Take action today to educate yourself and “plan single.”

[1] https://www.investmentexecutive.com/news/research-and-markets/long-term-financial-security-for-women-at-risk-study/

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