While divorce is hard at any age, for midlife women whose time and energy has gone into their families -- not themselves -- it's particularly important to be as savvy as possible.  Since many women are far more likely than men to suffer financially when their marriage unravels. According to the National Marriage Project at Rutgers University, a woman's standard of living will drop by as much as 27% -- compared to 10% for men -- after a divorce.

After her own experience, Melanie Johnson, our women and divorce expert, decided she wanted to help women avoid the pitfalls she didn't know about then.  When you're in midlife, if you suffer a drop in your standard of living, there aren't as many years left to make up the shortfall. Here, Melanie gives some great advice for us and for any woman we know going through this difficult transition.

I pick up the phone only to hear a very familiar story - “I’ve been married 25 years and my husband has filed for divorce.  I have not worked for some time as I have stayed home raising our children over the years.  My husband left and has withdrawn most of the money in the account and I have a mortgage due in a couple of weeks not to mention other obligations.  What can I do?”

I know exactly the fear one feels when going through a divorce.  After being married 17 years with three children, I found myself going through a difficult transition that I thought only happened to other women.  I made virtually every mistake one could make when divorcing.  Hence my passion for what I do today.  Every month for the last four years, I provide a workshop every second Saturday of the month for women going through divorce (www.AustinDivorceWorkshop.com ). Information is provided by a professional family law attorney, a marriage and family therapist, and me, a financial advisor trained specifically in divorce issues.  I inform attendees on ten financial pitfalls you want to TRY and avoid.  Much of the time women have no choice and are thrown in to the divorce process without much notice.  I never advocate divorce, but rather try and empower women to take control of their financial future regardless of their situation.  Most women wait until a life transition – divorce, death of a spouse or parent, career change or retirement before they decide to get smart about money.  My most important message to women is NOT to wait for a life transition before getting smart about money.  Every day I am speaking to more and more women who ARE getting wise and taking control of their financial future.

This article will be the first in a series to let you know what financial pitfalls you or someone you care about need to avoid if ever you go down that road to divorce.  Moreover, these tidbits of information provided here and in the future are wonderful to help strengthen one’s marriage or partnership.  Our society and culture has given men the title of being the “bread winner” and therefore the money manager/investor in the family.  As partner in a relationship the lines of communication need to be open for a healthy and happy relationship.  

In regards to a divorce, it is especially important, because you want an account that cannot be “cleaned out”.  I am not telling you to hide money, because you will have to disclose all of your assets during the inventory process.  You just need an account that only has your name on it.  Divorce is a cash hungry situation.  Cash equates to power and independence during this time.  During a divorce, everything seems to cost more and takes longer than you expect.  Some of the costs include court filing fees, legal expenses, duplicate living expenses for the spouse who leaves the home, transportation between homes for the children, costs incurred to make yourself feel better, and many other items.  Remember, that the money previously used to support one household must now stretch to support two.  For this reason, you will need to accumulate cash.

Where can you get this cash?
•    Savings Accounts
•    Brokerage Accounts
•    Credit Cards-costly, multiple uses
•    Home Equity Loans-Be careful here, too!
•    Family, friends
•    IRA – last resort;10% penalty if you are not 59 ½ yrs. old and taxes

Keep the cash readily accessible.  Do not be tempted to put your cash reserves in CDs or other accounts that pay a higher interest rate but limit your access to the funds.  Keep in mind that the purpose of these funds is to give you cash for use in the difficult and expensive time of divorce.  Earning interest is not your primary purpose in setting money aside.

I know it can sometimes be difficult to come up with the cash.  Save as much as you can from each paycheck and any other source of income that comes in.  Cut back on our expenses where possible in order to stash cash.  Unfortunately, those cutbacks in lifestyle may be permanent, as it is nearly impossible to support two households with the same income that supported one household.  

I believe Donald Trump actually coined the phrase, “Cash is King” before his divorce.  If anyone knows about cash, it would be Donald.  Just remember, in a divorce cash equates to power and independence more than any other time.  Don’t leave your self short changed.

Melanie Johnson is a financial advisor and educator to women on money issues.  She had to learn to master her financial life the hard way after her rapid transition from married life to single motherhood.  Through working with women as a Certified Divorce Financial Analyst and a financial advisor, Melanie helps women develop a thriving relationship with money centered on uncovering limiting beliefs about money, value and success.  She is the president of Athena Financial Group, Inc., an independent, fee-only, financial advisory firm and co-founder of Divorce Financial Solutions.