Want to find out what you should know before you divorce? In fact, what you should know, even if you’re in a very happy marriage? One Capsule reader has a tale of caution – so we take heed from her experience, and have expert advice from a divorce coach.
Welcome to the Divorce Diaries. In our past instalments over the last year we’ve covered everything from when you’re most likely to divorce to whether they’re contagious to whether being on the contraceptive pill can effect your chances! and have now spoken to dozens of women – including one whose husband announced he was leaving her to have an open relationship with a 19-year-old, another who was quite literally ghosted by her own husband and one who discovered the real reason her husband divorced her was because he had a baby with her SISTER.
If you have a topic you’d like to discuss, share your thoughts, experience or advice about, drop a line to alice@capsulenz.com.
How much do you know about your partner’s finances?
Maybe you share all your bank accounts and are across everything – you know exactly how much they earn, how much they spend each month and what they actually spend it on, plus all of the bills and home expenses in your household. But, for a lot of women, that certainly isn’t the case. You may know a fair bit, or even think you know most of it, but perhaps not the full picture.
Charlotte says that was the case in her marriage.
“We had a joint account – that’s where all payments like our mortgage, power, water, subscriptions would come out of,” she says. “We got paid into our separate accounts and would transfer over the lion’s share, but keep some to ourselves so that we could have a bit of freedom to make purchases, without having any nitpicking. I didn’t earn as much, because I’d taken time out from my career to raise our children, so I paid a smaller amount than him into that account – but I thought I had around what he did to play with in my own account.”
But, after 18 years of marriage, Charlotte and her husband Doug separated. “It was very sad, but a long time coming,” she says. “We probably should have done it sooner, but we followed that cliché of trying to stay together for our kids. Ultimately, we’ll probably be paying for their therapy bills at some stage anyway.”
After years of trying to make it work, they finally conceded it was time to go their separate ways. “It was still very civil,” says Charlotte. “I thought there was still a lot of love there and that it was amicable, and we’d put our best foot forward for the kids’ sake. But, I thought wrong, unfortunately. I didn’t think I needed to see a lawyer before we separated, but now it’s a regret. My only regret bigger than that is not delving into our finances before we split. I wish I had known exactly what he earned – it would have made me ask a lot more questions, and likely sent me straight to a lawyer when things didn’t add up.”
Charlotte says she left getting a lawyer too late (“that’s what the lawyer told me!” she says). “I went into it too naïve. We worked through an agreement, but he’s really looked after himself. I’ve come out of it a lot worse financially than him. I’ve since learned that he earned a lot more than I thought he did and has done a very good job at hiding money away over the last few years. He obviously knew we were headed for divorce, so set himself up financially so that I wouldn’t get an even split of his earnings. I thought I knew what he earned, but I was well off.”
Quite rightly, Charlotte feels her husband’s earnings should have been evenly split, as she put her career on the backburner to raise their three children. She spent a total of five years at home, caring for their three children as babies and toddlers, and then for the next 10 years worked school hours – something that ended up reducing her potential earnings.
Divorce coach Bridgette Jackson of Equal Exes says she sees this same scenario frequently playing out with women who come to her for help.
“Every week I see a woman who has been the main caregiver in her home,” she says. “She will have typically helped him with his career while raising the family. She didn’t have her own income so was given an allowance for the household bills and her own spending money. Her husband may have said, ‘you’re too busy with all that’ so he will take care of their finances, or it is the roles they have just fallen into. When this has happened, many women have typically thought ‘she’ll be right, he will look after me’. Unfortunately, this is not the case in many instances.”
Bridgette says the dynamics of a relationship can be changed, when one partner – typically a woman – stays home to look after children.
“For women who become a stay-at-home-mum or a part-time worker and full-time parent they can become more reliant on their partner, when there isn’t an agreement on how the finances will work with transparency,” she says. “And financial dependency patterns in relationships can have significant implications when it comes to financial decision-making autonomy. That dependency can often effect power dynamics, communication, and the ability of one party to assert their voice and priorities in financial matters. Over time, there is a natural progression of disconnect leading to little understanding of, or input over the couple’s finances and she becomes disempowered.”
Bridgette says around 75% of the women she sees in her business have no clarity on their finances or their partner’s finances. Some don’t even know what their mortgage is. This is in line with the findings of a study by the Financial Services Council conducted in 2021, which found that 80% of women rated their financial wellbeing as only moderate, low or very low. Capsule readers may potentially buck the trend though – when we polled readers last month, 68% who responded said that they knew everything about their partner’s finances (everything from what they earn, to their debts, savings and what they spend in a month). Just 21% said they didn’t know, and 12% said they were unsure.
Bridgette says that if you’re not too sure of your exact financial situation, or that of your partner, a lot of it depends on who has been the main breadwinner and caregiver, but there are five things she recommends doing:
- You need to know the income coming into your household. For some it will be, what exactly does your spouse earn? If you do not know, you should gather copies of tax returns, bank statements and other documents that will provide information on your current joint finances. This includes statements for investments, term deposits and retirement funds e.g. KiwiSaver.
- Create an asset list of all your joint major items, that could be considered assets e.g. furniture, jewellery, artwork, property, cars etc.
- If you do not know already, you need to identify the family household budget and expenses. If possible, you need to go through your accounts for the past 12 months and document mortgage repayments and note interest rates [and expiry or roll off dates for fixed mortgages], and list utility costs with other household expenses for each month.
- Keep track of the cash you both spend on a daily basis, as this is also part of the household expenses.
- I always recommend that a woman has her own bank account, with a different bank.
Whatever your situation is, Bridgette says it’s never too late to learn more and there are many online resources out there to help you.
“I recommend The Curve, Craigs Investment Partners and Enable Me who all see women with little or no financial knowledge,” she says.
