Every year as Valentine’s Day approaches, Melanie Johnson’s business increases. She doesn’t own a flower shop or a jewelry store. Johnson’s Austin firm is Divorce Financial Solutions, where, as a Certified Divorce Financial Analyst or CDFA, she helps people through the financial aspects of letting go of a marriage. “During Valentine’s is when we see more women, primarily because of emotions,” said Johnson. “Emotion is what causes many women to end up not thinking clearly.” '

Lisa Fox, senior investment advisor at the Austin office of South Texas Money Management, Ltd., agrees. “It’s such an emotional time. You just want to get through it, get it over and behind you so you can focus on the future,” said Fox, who also is a Certified Financial Planner and CDFA. A laudable goal, but both women think that kind of attitude could lead to costly – and potentially long-term – financial mistakes.
 
“We all plan for our wedding really well, and at that point we have no assets,” said Johnson. “But after 10, 20, 30 years of marriage, we have accumulated some assets, so we need to plan for divorce equally well.” Such planning is particularly important for women. Fox and Johnson cite some unsettling numbers: After a divorce, 45 percent of women see their standards of living decrease by about 27 percent. Men, meanwhile, typically see their standards of living increase by 10 percent.There are many reasons for the disparity, but women can take steps to keep from becoming just another number on the losing side of the divorce ledger.

TIP 1: Know your money.
“Many times women have no idea what they have financially,” said Fox. “You want to make sure you’re aware of every investment. Read every financial statement. If there’s anything you don’t understand or something seems out of whack, then you need to really investigate it. If you’ve got $30,000 in income and $25,000 is being paid out in college education costs, some­thing’s wrong there.” Don’t just examine the financial statements. Make copies of them, said Fox. “Document, document, document,” agreed Johnson. “Everything: Stock options. Frequent flyer miles. You may not want it, but make sure you know it exists. I hear all the time, ‘He took the records. I don’t have anything.’ Make copies for yourself and give them to a friend, a relative, put them in a safety deposit box.” The information will put you in a better negotiating position and should save you money since your attorney won’t have to bill you for time spent tracking down the documents.

TIP 2: Don't accept 50-50 split.
An equal division of marital assets is not necessarily a fair distribution. “It depends on a lot of factors, your income potential moving forward being a big one,” said Fox. Consider the woman who quit college when she married. “It will take her a lot longer, and she may never reach the income potential of her husband who, for the last 20 years, has been working and moving up the ladder while she’s stayed home to take care of the house and raise the kids,” said Fox. “She has no skills, no experience in the work world. She didn’t finish college. A 50-50 split wouldn’t be fair because she’s definitely going to need more to sustain her or at least try to provide her close to the lifestyle she’s gotten used to living.” And about those children. The mother usually is the custodial parent, and she often focuses on a settlement that puts the kids first. Such was Johnson’s case. “I didn’t ask the right questions,” she said. “I thought I knew everything financial, and I wanted to keep divorce amicable. I ultimately cost myself. And I made decisions for the children, but that ultimately hurt them.” 

TIP 2: Don't accept 50-50 split.
An equal division of marital assets is not necessarily a fair distribution. “It depends on a lot of factors, your income potential moving forward being a big one,” said Fox. Consider the woman who quit college when she married. “It will take her a lot longer, and she may never reach the income potential of her husband who, for the last 20 years, has been working and moving up the ladder while she’s stayed home to take care of the house and raise the kids,” said Fox. “She has no skills, no experience in the work world. She didn’t finish college. A 50-50 split wouldn’t be fair because she’s definitely going to need more to sustain her or at least try to provide her close to the lifestyle she’s gotten used to living.” And about those children. The mother usually is the custodial parent, and she often focuses on a settlement that puts the kids first. Such was Johnson’s case. “I didn’t ask the right questions,” she said. “I thought I knew everything financial, and I wanted to keep divorce amicable. I ultimately cost myself. And I made decisions for the children, but that ultimately hurt them.”