Nancie McLeod’s experience is not unique. For many women, the end of a marriage can lead to a crash course in personal finance, as they have to rebuild their financial lives after decades of living on a different financial system.
The Financial Knowledge Gap
Like many women of her generation, Ms. McLeod grew up in a household where money wasn’t discussed openly. This lack of financial literacy continued into her marriage, and it wasn’t until she started talking to her friends in similar situations that she realized the extent of the problem.
- Many women, especially those in heterosexual relationships, have traditionally been taught financial literacy by their husbands.
- Women are often focused on running the family and caregiving, leaving them with limited exposure to financial education.
- The lack of financial education isn’t about intelligence, it’s about exposure, according to certified financial planner Zena Amundsen.
According to Zena Amundsen, a certified financial planner based in Regina, gendered divisions of labor in the home often result in men taking the lead on financial decisions. This can lead to a lack of financial literacy among women.
Financial Challenges After Divorce
A 2024 survey by Edward Jones found that only about a quarter of Canadian women said they learned money management in school, compared to 35% of men. This lack of financial education becomes painfully clear during divorces, as women often discover that they can no longer income-split with their spouse, a move that can significantly reduce taxes.
- Taking income-splitting into account, women often find that they have to reassess their financial situation and adjust their financial goals to reflect their new life.
- Many women haven’t established a credit score in their own name, making it essential to open a bank and credit account in their name and update any authorizations on existing accounts.
- Updating all legal documents and authorizations, such as a will, power of attorney, and beneficiary designations, is also crucial.
Women going through divorce often face significant financial challenges. According to Toronto-based divorce financial consultant Eva Sachs, one common shock is that many women haven’t established a credit score in their own name.
Key Steps to Financial Recovery
Experts recommend a few key steps for women going through divorce to rebuild their financial lives.
- Assess your financial situation by tallying your assets, debts, and sources of income.
- Adjust your financial goals to reflect your new life, especially if you have one fewer income.
- Open a bank and credit account in your name, and update any authorizations on existing accounts.
Working with a financial adviser can also be beneficial during and after the divorce process.
Empowerment Through Financial Education
Women need to understand finances and that they may be on their own financially after divorce. Nancie McLeod is determined to help her children learn about saving, and her two sons have a standing deal with her: whatever they contribute to their tax-free savings account each month, she’ll match it.
“I wish I knew more, but I’m still learning.” – Nancie McLeod
“Women need to understand finances, and they need to understand that they may be on their own,” Ms. McLeod said. “It’s also a smart idea to work with a financial adviser for guidance during and after the process.”
A Story of Empowerment
Lori Germain, who lives in Toronto and separated from her husband in 2021, emphasizes the importance of preparation in the divorce process. She went through her finances line by line with an adviser, which helped her feel empowered during a time when that didn’t happen very often to women.
Lori Germain’s experience is a testament to the positive impact of financial education and planning in the divorce process.
For Lori Germain, preparation made all the difference in her divorce process.
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