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Women In Transition

It is already difficult enough as a woman to achieve a solid level of financial management experience. There is now more evidence that women are increasingly likely to be thrust into the position of Financial GateKeeper with very little training for the job.

To wit, these main transitional events:

Divorce | Widowhood | Caregiving | Managing an Elder's Estate | Wealth Inheritance

I’ll be discussing the challenges and making suggestions for each of these events. This is an area of focus that has not been explored by current prevalent ‘messaging’ and yet the import for women is huge.

Women & Reverse Mortgages

Something alarming came across my desk this morning. In an article from the New York Times some statistics were cited about Reverse Mortgages.   

The highest percentage of 'subscribers' to this product falls in the category of single women (vs. single men or couples).  A whopping 44% of these loans were done by single women in 2007 vs. the 18% attributed to single men.

This means that more than twice as many women as men are compromising possibly their only asset - their home equity (in a sense: selling it in exchange for the current cash flow).  But at what cost?

Of course, we know the demographics tell us that women outlive men so this variable accounts for some of the higher levels seen among women using this financial vehicle.  Meanwhile, even after adjusting for the longevity factor, I hope these women have thoroughly informed themselves of the consequences. Sadly, it also speaks to the fact that women don't prepare as well as men for retirement funding, and the statistics that tell us about widowed women who were not below the poverty line while their husband was still alive.

Bottom Line: 

• Consult with a 3-rd party professional (read: attorney) before you take this course of action.  Even if it costs you another $1,000.00 (which it probably won't), with your financial security at stake, getting some professional legal advice can prevent abusive practices that are already abounding within this rapidly growing area of lending.

"Just sign here"

One of the most common financial behaviors among married couples I hear from my clients is the "Just sign here" syndrome. 

Whether it's your tax return; business partnership documents; mortgage (re-) financing papers, etc., signing a document without reading it or at least attempting to know what's in it, puts you in a legally binding position.  Your signature on a document is not a trifle.  Of course, this holds true in any circumstances where  you are asked to sign a document or contract - and not just with your spouse.

Even if the document is 10 pages long, you should take as much time as you need - and without being pressured - to read it.   

How to read something that seems like a lot of legalese and mumbo jumbo? 

• Learn to read the titles and section headings first. It gives you a starting point.  From there you will find it easier to look at the rest of the information below the titles and/or section headings.  You may not read every word but at least you will know something about what you may be 'binding' yourself to. 
• If it's a tax return, ask your spouse to go over the results with you.  Starting with the Big Picture (a general overview) and then drilling down to the details after that is always the best approach.

So the next time you see one of those little yellow flag stickies attached to a document that say:  "Just sign here" remember that you too can read what it is you're committing to.  It's a right and a responsibility that you want to get in the habit of exercising!

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