Women And Finances
An Eventual Life On One's Own
Written By Elinor Spokes
In a recent post on the blog “Financial Literacy and Ignorance,” Annamaria Lusardi, a professor at the George Washington University School of Business, wrote “There is a substantial gender difference between women and men when it comes to financial literacy: Women know much less about economics and finance than men. This is true not only among older cohorts but also among younger generations.”
It seems hard to believe. Although many women today have advanced degrees and are taking on leadership roles in the community and in the workforce, many are still lagging when it comes to financial literacy. What makes this even more concerning is that women are more likely to be on their own at some point in their adult lives, whether by divorce, spousal death or single-by-choice.
So, how should women prepare for this possibility? What do they need to know to provide financial security for themselves?
Several local Jewish professionals in the fields of financial planning and estate planning offered advice on how women should best prepare themselves for a time when they may be on their own.
“Knowledge is power when it comes to finance,” says Dorie Rosenband, founder and managing partner of &Wealth Partners, an independent financial advisory firm based in Baltimore and New York.
Rosenband often deals with explaining the confounding financial puzzle to family members of individuals who die leaving their financial affairs in a state of disarray. She has found a niche working with women whose husbands may have initially been her client. Now they are widowed and for the first time trying to decode their spouse’s finances and calculate and plan for what it will cost to live their lives on their own.
Originally from Providence, R.I., Rosenband believes that women should be engaged in the preparation of financial plans before the death of a spouse. She encourages communication among family members about the accessibility of financial records, where accounts are housed and what financial plans are in place.
“You need to know what [finances] you have, and where it is. When someone dies, it is too late if you didn’t get that information while they were living,” she says.
One well-meaning, well-organized male client, she recalls, had all the family finances in good order before he died. But he forgot to leave all the account passwords, leaving the family without access to critical financial information.
“You never want to hear ‘I never knew,’” says Morey Zolet, senior vice president and family wealth director of the Zolet Lenet Group with Morgan Stanley Smith Barney at Green Spring Station.
“It is a team sport; we make sure that the spouse is coming along to the meetings to avoid misinformation or lack of information,” adds Ryan Lenet, vice president of the Zolet Lenet Group.
“Each person has their own system of organization which makes sense to them when it comes to finances,” Rosenband says. For example, some like to keep monthly financial statements while others are comfortable referencing them online.
“But one cannot assume that their spouse or family will know their personal system. So it is essential to be organized with one’s finances at all times, and to let someone close know where to find the key to the system of organization,” Rosenband says.
Finances and Divorce
Rosenband recommends “Women Vs.Men - Financial Rebound After Divorce,” an article on E-How Money. It suggests that women maintain their own credit history while married so they have something to fall back after a divorce.
The articles says that “A good credit history can help you qualify for lower interest loans should you need to take out a loan.” The story quotes a report by “ABC News,” which recommends having a solid post-divorce financial plan, including a budget, before ending your marriage.
It’s important after a divorce, advises Zolet and Lenet, that all financial and legal documents, especially those involving the designation of beneficiaries. be reviewed and redrawn to reflect the changes.
Jill Snyder, an estate planning attorney with offices in Towson, agrees. She recommends that the final steps following a divorce is a consultation with an estates and trust attorney to plan for the future.
Newlyweds also should create a financial plan soon after they are married, advise both Zolet and Lenet. This plan should reflect goals set together so that there is a mutual understanding of all plans.
Once plans have been made, annual reviews should be conducted by both spouses, they add.
Both the Zolet-Lenet Group and &Wealth Partners strongly encourage creating a “team” to help plan for the future which would include an estate planning lawyer to create legal documents such as wills, living wills and powers of attorney for both wife and husband.
Snyder says that it is often the men who tend to be interested in setting up the financial plans but the women who are interested in setting up the guardianship.
She strongly recommends that at any age, both women and men should have their incapacity documents in place: power of attorney for health care and a living will. These documents, and other estate planning documents such as a will and a power of attorney for property, should be reviewed every three to five years or when there has been a major change in personal or financial situation.
The more planning that is done, the better, to avoid conflict and confusion, advises Snyder. “Always know what you have. Make sure that your beneficiaries are accurate and how much you have is spelled out,” she says.
“Women should not be fearful to have conversations about their financial status and legal plans and what needs to be in place when their spouse dies,” Snyder says, “Don’t be afraid to have the discussions; it will be a relief when the planning is done. Just because you plan for the inevitable doesn’t mean it will happen sooner. It just means you are prepared.”
“Women should not be afraid to ask for help. As women, we ask our girlfriends for advice about everything from pedicures to pediatricians… Let’s expand our conversations to the realm of financial resources and begin to share our collective wisdom in achieving financial independence,” says Rosenband.
Financial Planning Websites
mint.com: On-line program to help with budgeting.
myestatemanager.com/#checklists: Addresses the steps of having medical directives in place. There is a digital lock box on the site where people can store important documents in one place which can make keeping organized easier
Suggested by Dorie Rosenbrand, founder and zzmanaging partner of &Wealth Partners