’Til debt do us part: How can women financially protect themselves in relationships?

“Financial pressure and breakdown is the leading cause of separation.”

As women, we’re taught to live life looking over our shoulders. While we’re walking home, in car parks and even in spaces where unconditional love and respect should flourish, like in the privacy of our romantic relationships, we’re made to be on high alert. Frighteningly, one in six Australian women have experienced economic abuse by a partner. Currently, there’s still a 13.3 per cent gender pay gap in this country. The scary reality is women are more likely to face financial hardships.

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With that in mind, I talked to Australian divorce lawyer Cassandra Kalpaxis about why divorce costs more for women, how we can protect ourselves financially in relationships, as well as what red and green flags we can look out for.

What steps can unmarried women take to financially protect themselves in relationships?

[Women should] seek financial advice from accountants and financial advisors… early on. Wait to enter into a relationship on a defacto. Keep your money separate, keep your investments separate, and make sure they are the right person before setting joint financial goals and going in on investments together.

Have conversations about money early and regularly. Take notice of your partner’s financial habits and how they spend and save, and find out what their goals are with money. Notice how they treat it, and what their attitude is to contribut[ing] towards a home and overall lifestyle. Do not romanticise the future with someone and overlook the red flags when it comes to finances. Financial pressure and breakdown is the leading cause of separation.

How can married women protect themselves financially?

This is a tricky one, as no one can be 100 per cent protected. I would advise having a separate bank account at all times, [and] a separate source of income and not being solely dependent on their partner for financial support… You can also enter into a financial agreement prior to marriage setting out the intentions of the parties if the relationship breaks down. However, these should be exercised with caution as they are not foolproof.

Why does a divorce cost more for women in heterosexual relationships?

The ability [of women] to regenerate wealth is not the same as their male counterparts. Generally in traditional family models, [men] would be able to work without the pressure of having [to care for] children full-time [after divorce]. Women are [typically] juggling work, the care, welfare and the development of children, and it can become [difficult] for them to come out financially on top if they are to deal with all of those things simultaneously.

There is also the issue of having to pay for legal fees, which can be unnecessarily incurred if [a] spouse is reluctant to disclose their financial position or has not been [privy] to the finances during the relationship. This can cost more than anticipated and eat into the asset pool available for distribution.

Financial red flags in relationships?

Partners who say you don’t need to worry about this. [People who buy] assets without disclosing them to their partner. Companies being opened in their name. Not openly discussing the finances of the household. Being secretive about income and expenses. A partner who refuses to share the money or who cuts the other person off financially. An attitude of what is theirs is theirs, and what is yours is yours. Refusing to talk about financial goals. Being unwilling to commit to a budget. Not having a mindset of it being joint funds.

How about financial green flags?

Weekly discussions about household income and bills, [and] planning together for the future. Having joint goals, tracking financial progress [and] consulting everyone about the decisions to be made.

To read about the divorces of Australian women, head here.