September 14, 2020
The White Knight Myth
Blindsided by the bite (of divorce)
Divorce can bring a number of unpleasant financial surprises, such as discovering that your joint assets aren’t nearly as healthy as you thought or that your debt load is higher than you realized
Even before things turn sour in a marriage, one spouse may play fast and loose with the couple’s finances unbeknownst to the other, such as running up credit cards or decreasing contribution amounts to retirement savings.
If you don’t have a good grasp on the money coming in and going out of your home, it can come as a shock after you file for divorce and start going through the financial disclosure process.
That’s the unfortunate trap some women are entangled in when they decide to end a marriage. Often, they have put their careers on the back burner while staying home to raise their children — and because their partner is the primary income earner, they hand over control of all the household’s finances.
I’ve worked with clients who didn’t have any financial assets in their own name — not a credit card or a chequing account. That’s a dangerous move that can put women at a severe disadvantage if the relationship unravels.
Forewarned is forearmed
Women must separate the ideas of money and romance. For instance, many people balk at the idea of creating a pre-nuptial agreement, arguing that it’s not very romantic, but I’m in favour of them for the protection they offer the parties.
Marriage is a contract, so it makes sound financial sense to create a legal document that outlines the assets and liabilities each party is bringing to the union. It’s also a good insurance policy if one party has accumulated significant assets while the other has a mountain of debt or bad credit.
Similarly, I encourage women to have a separate bank account in their name to ensure they have a consistent credit history, something that’s vital if they’re looking to sign a lease on a new property post marriage.
Before you have the divorce talk
If you’re thinking about divorce, there are three critical steps you should take before having that conversation with your spouse:
-get a credit card in your name.
-make sure you understand all of your household’s finances, including investment statements, tax returns, RRSPs, credit card balances, and money owing on jointly owned credit lines.
-open a separate bank account in your name and deposit as much as you can manage.
Financial empowerment as a self-care tool
Taking financial control of your life gives you freedom of choice, and there’s no better way to bolster self-confidence than being able to take care of yourself.
Booking an exotic vacation or buying a designer handbag might be a nice pick-me-up, but the happiness is often short-lived. When you create financial independence for yourself, it is truly empowering.
Being dependent on another person restricts what you can and can’t do. Money equals freedom; for example, to leave a job that’s not working for you or a relationship that isn’t healthy. Being stuck in a toxic union can seriously undermine your sense of self-worth. When you’re financially independent, you can weather the storms that life inevitably brings.
White knight a dangerous myth
Even today, women are still socialized to embrace the romantic notion of the white knight rescuing us, but those myths do women a disservice. When you surrender your responsibilities, you are also giving up your rights in many cases.
Going through a divorce can be the darkest period in a person’s life, but there is always an opportunity to emerge from it as a stronger and more confident version of yourself.
I’ve met with women in the most challenging circumstances, who have left physically abusive relationships with no self-esteem and next to nothing in terms of assets. One filed criminal charges against her abusive husband and lived in a shelter while she went back to school to become a paralegal.
In the end, we have no choice but to rescue ourselves. It won’t be easy, but it will empower you.