One of the primary purposes of financial planning is to prepare for the unexpected.  It can be considered risk management, much like the purchase of insurance. The pathways of life are sprinkled with unexpected events, some joyous and others not.  An unexpected event can be particularly painful when it comes to the loss or impairment of a spouse and/or the dissolution of a marriage. 

Frequently, women are caught unprepared, especially if they have delegated financial responsibilities to their spouses or lack financial knowledge.  Men, too, can and do experience financial hardship after losing a spouse.  Key factors contributing to hardship include:

1.       Age at time of spouse’s death or divorce

2.       Whether both spouses were working

3.       Life insurance coverage

4.        Savings and assets at time of transition

5.       Debt levels

6.       Healthcare costs leading up to the loss

8 Ways to Help Protect Financial Wellbeing

Below are steps women and men can take to help protect their financial wellbeing while married or in a long-term relationship.

1. Maintain financial independence
   • Have independent bank accounts, credit cards, and investments.
   • Avoid being totally financially dependent on your spouse.
   • Contribute to your own retirement accounts like a 401(k) or IRA.
     
2. Understand your household finances
   • Be involved in budgeting, bill paying, and major financial decisions.
   • Know where your money is going and have a good sense of your net worth.
   • Review financial statements and tax returns regularly.
     
3. Build your own credit history
   • Establish your own credit by having credit cards or loans in your name.
   • Monitor your credit report and score to ensure there are no issues.
     
4. Protect your assets and income
   • Ensure your name is on the deed or title of any major assets, like a house.
   • Purchase adequate life and disability insurance for both spouses.
   • Have a plan on how you would support yourself if your spouse passed away or you divorced.
     
5. Document your financial records
   • Keep copies of important documents like bank statements, tax returns, wills, etc.
   • Store documents in a secure place.
     
6. Consult a financial advisor
   • Work with a qualified financial planner to create a comprehensive financial plan that gives both spouses time and attention.
   • Ensure any major financial decisions are discussed and agreed upon.
     
7. Obtain and implement estate planning
   • Consider titling of assets.
   • Update beneficiaries.
   • Have up-to-date financial and healthcare powers of attorney.  Make sure your state of residence doesn’t require one that is state-specific.
     
8. Prepare for the unexpected
   • Have an emergency fund with 3-6 months’ worth of living expenses.
   • Make sure you understand how to access funds if your spouse becomes incapacitated.

Taking these proactive steps can help both spouses maintain financial security and autonomy within a marriage.