Breaking up is hard to do, and nowhere is this more true than during a divorce.
Today, sadly, the words “happily ever after” are not always the case, with increasingly more couples choosing divorce over domestic bliss.
But what about the financial burden of ending a marriage? We’ve all heard the horror stories about costly lawsuits that come with a marital split.
So I was pleased to read an article in The Huffington Post that tells the story of a divorcee who, when her marriage dissolved, became more responsible with her finances.
Following up on her article, I chatted with Catherine New about the lessons she learnt after her divorce.
“I realised that one of my biggest financial vulnerabilities was that, on some subconscious level, I assumed that someone or something else was going to be the answer to my financial life,” she said.
“But through the split, I came to the understanding that the only person who could save my financial life was me. I had to take control of my own money and that process has been hugely empowering. I think that process goes for both men and women.”
According to the Women’s Institute for Financial Education, 2.8 million people worldwide get divorced each year. Of that number, they found that women suffer the most. The institute says women’s standard of living declined by 27 per cent following divorce. In contrast, the living standard of men actually improved by as much as 10 per cent after a marital break-up.
So what explains the economic disparity between men and women? Well, following marital separation, it is mostly women who become the primary caregiver to their children and, with child support often insufficient to cover the real costs of parenting, women are the ones who bear the financial brunt.
Then there is the issue of career. Women typically sacrifice their career in favour of raising children, while men experience career growth regardless of their personal lives. So for divorced women, trying to return to the job market is that much harder.
I asked Catherine what was the most common mistake she felt women (or anyone) make about their finances. “Staying in denial about money,” she said.
“If you have several credit cards, it can be easy to be vague about the total amount you really owe and let debt continue to grow.
“Or maybe you’re thinking that you’ll start saving more for retirement next year, or that it doesn’t matter that you’ve never bothered to see what kinds of fees you’re paying on your investments. But if you don’t get honest about what is happening with your finances, you don’t even have a chance to improve them.”
While divorce statistics in the UAE do not compare with those of the western world, the figures suggest that divorce is becoming more prevalent here.
In 2010, the UAE Marriage Fund was given access to court records in Dubai in an effort to uncover the reasons behind marital splits in the emirate.
Led by Fakir Al Gharaibeh, a sociology professor at the University of Sharjah, the research team examined hundreds of divorce documents from the courts in all seven emirates, and it interviewed four Emirati divorcees.
The study found that the UAE’s annual divorce rate was estimated at 30 to 32 per cent, as more divorces were reaching the courts than before. And the price tag? A minimum of Dh800 million is spent on divorces in this country each year.
Advice from a divorcee
“The best advice I heard this year came from an unlikely source – the rapper Slim Thug wrote a personal finance book,” says Catherine New.
“His advice was: ‘Don’t live a Bentley lifestyle on a Benz income.’ In other words, live a lifestyle you can actually afford. If you can afford designer shoes and clothes, by all means buy them. But if those shoes are going to cause you stress and debt, it’s not worth it. Getting real about your income and expenses is the first step to getting ahead.
“Secondly, become a passive saver and set up automatic deposits into your retirement accounts straight from your paycheque. Don’t even let that money into your chequing account where you might spend it. If your workplace offers a matching sum for retirement, take the maximum amount, as that is essentially free money.
“Lastly, don’t be afraid to ask questions or speak up about money. It’s your money and you have a right to know where it’s going. Asking a question or picking up the phone can often mean a big difference in a financial transaction that will save or earn you money. For me, these three steps have changed my relationship with money and have helped me stay engaged with my own financial future.”
Janelle Malone is a wealth commentator, writer and author. You can read her blog at www.womenmoneyandstyle.com
