I hear a lot of horror stories, via blog readers, Instagram follower direct messages, and just in life.
Know what they all have in common?
Women who didn’t think it was going to happen to them so they never planned for it.
3 Things Every Woman Should Own
1. A credit card in her name only
A credit card with a decent limit of at least $2000 may be enough to drain in case you need the money desperately. I’d prefer $10,000 to be safe but anything is better than nothing.
You can use that money to put down a rent payment on a place, pay for a hotel room in a pinch and use it to cover expenses until things get sorted.
Having a credit card, and being responsible with it by spending on it and CLEARING the balance ASAP (treat it like a debit card), can also help you build your credit.
Your credit is crucial to everything from renting an apartment (landlords check your credit rating), to renting a car, getting a cellphone, and even what interest rate you’ll get on loans of any kind.
It is the cornerstone of our society today and the higher your score, the better you’ll be treated.
You can download Credit Karma (app) for U.S. and Canadian residents, or check it on their site. You do not need to enter your SIN number if you don’t want to, but you’ll need to answer a bunch of credit report questions instead.
(I never enter or give my SIN number unless forced to.)
A credit card in your own name is a bit of a safety net. You never know.
For instance, your spouse may seem to be very financially responsible and everything has been going great for years.
Then suddenly, something happens and you realize when you dig into the accounts that things weren’t what they seemed – the cards are all maxed out in a credit churning cycle, there is barely any money to speak of, and there are debtors at your door.
SOMEHOW, you’re going to need to still access money to keep the lights on, food on the table and gas in the car to work.
You may be thinking: But I have a credit card! I am an authorized user on his account!
No, you don’t have a credit card… IN YOUR NAME. You have one to use and spend on, yes, but it is not YOUR credit card.
You need a credit card in your name, not as an authorized user because piggybacking on another’s card means you are borrowing their credit score and so on, but you don’t get to keep any of it if you get kicked off it.
Authorized users, get to benefit from a boost of the credit score, yes, but they are not liable for the balance, the credit holder is, therefore, authorized users are not taken as seriously in terms of building their own credit score by FICO (credit bureau).
YOU NEED A CREDIT CARD IN YOUR NAME ONLY.
If the credit card holder also kicks you off the card one day, you lose all of that built up ‘credit score’ because you weren’t a real credit card holder to begin with, you start back at zero, and will find it hard to build something like that back up again over the years.
2. A bank and investing accounts with her own savings
In a high interest savings account naturally for the savings account. Not too much, just a few thousand up to $10,000 if you want to feel secure.
Now the credit card you may have been nodding along with me, but with bank accounts and savings, things could come to a screeching halt for you.
“OMG NO! How could I keep secret separate savings apart from my beloved??”
Well, I never said they had to be secret. They can know about them if you want to be transparent.
However if they start asking WHY and taking it as an insult that you don’t love them, maybe it is a good idea to make them secret then. Your call. Just make sure you have one either way.
The way I see it – no one in a healthy, open relationship built on trust should ever feel like they have to justify basic things like a bank account in their own name, with their own savings, or feel threatened in any way that their spouse has their own savings.
They should have their own accounts too! Again, anything can happen.
Joint accounts are great, but there are times when they could be frozen/seized and locked, or really, they just drain it without you knowing and you couldn’t do a thing to stop them because it’s jointly held.
One day, you’re flush with money, happy and spending, only to come home and be told it was all a façade and the bank has frozen all of your joint assets.
Even if your name is on them too, you can’t use the money in there if they are frozen. Again – where are you going to get money to pay for groceries? Rent? Utilities? Cellphone?
This is why you need a cache of money set aside just in your name that you know YOU can access. It is preferable to have both the credit card and the account because the credit card builds your score, and you won’t have to go into debt if you already have savings you can raid.
Plus, if you start having to work, where are you going to put all of this money? A bank account is so easy to set up it is laughable.
I also strongly suggest having investment accounts IN YOUR NAME because again — joint accounts can be easily drained (all of them!!), and it is a good idea to have these separate.
Even if you are a stay-at-home-parent, they should be contributing equal amounts to your investment accounts as they do to theirs. After all, you do the work at home, and they do it outside, what’s the difference if they really value you as an equal? They should be perfectly 100% fine with giving themselves $500/month for their RRSP and $500/month to your RRSP.
Someone challenge me on this.
That way, you both have equal assets growing, and you are investing on your own accounts and learning how to be financially independent just in case anything happens. You don’t need to be divorced to lose someone (e.g. death or illness) – if you are in the financial dark and you end up having to suddenly do all of this alone, it can be overwhelming to not know how to pay bills, invest the money, know what the plan is, etc.
Don’t you want to already know how to do all of this? Maybe you don’t necessarily need joint accounts to learn financial literacy, but it sure forces you to.
3. A plan
This is the one I feel most applies to mothers who stay at home and aren’t in the workforce, bringing in their own cash.
And even if you are working, but maybe you don’t make enough money to be on your own..
…to all of you I say — Have. A. Plan.
In case things go wrong, what will you do?
You don’t need to act it out, or talk to your partner about how you’re planning to handle your affairs in case you need to leave them — this is just a hypothetical “just think about it” situation.
Women who stay at home, give up a lot. I know it is not news to anyone, but their careers take a hit, and even if they were once high-flying executives, if you take a hiatus of more than a few years, you’re irrelevant (see: The aftermath of staying at home.)
You’re unlikely to find a job at your same pay grade before you left.
IT IS FINE. You don’t NEED to be a miserable AF Vice-President forever, stuck at work with golden handcuffs wishing you were at home instead with your kids until they go off to university.
Just HAVE A PLAN.
And INKLING of an idea!
If you need to, where can you get money?
Your credit card, and bank account, check.
If you need to make money quickly, what is the first thing you’ll do?
Brush up on your CV, keep in touch with contacts, and know what you can do as a job, even if it is entry level or minimum wage.
Plan for minimum wage – can you survive on that?
How? Where will you cut back? Are you able to apply for government programs to help assist you?
These are all things you do not want to be dealing with, while being stressed out, angry, tired, sad, and trying to figure out what to do next.
Here’s another horror story — everything was going just fine between a mother I knew.
Then she found out her husband was having an affair. She wanted to leave him but was unable to because she had no money. Literally nothing in her name, two small children, and nowhere to go.
Her friends & family was across the country and she couldn’t even afford a plane ticket to go see them.
She also doesn’t drive as she never bothered or wanted to get her license (was too frightened), and was basically confined to her neighbourhood, in a now strained, tenuous relationship with a man she now resents.
She couldn’t get a job because she had no savings to pay for the initial childcare while she was at said job, and minimum wage is all she could get, which wouldn’t cover much, without community food banks and help.
She is still with him. But now she is on medication and in denial that she’s using it to blank out her problems.
I only heard about her through another parent, but it seems as though she isn’t mentally strong enough to leave him anyway, and feels helpless.
She’s not the only one. I know another woman who was basically stuck with her now ex for a long time until she managed to get her own apartment with the help of her sister, but then ran up the credit cards buying things like a TV and a couch, and a bed when she had no money.
Just make sure you cover the true basics – a bed, even if it’s on the floor, food, basic toiletries, kitchen needs, and savings, savings, SAVINGS if you ever have to leave.
Don’t go ‘all out’ on your new apartment, you’re in survival mode, is all I can say.
HAVE. A. PLAN.
I cannot emphasize it enough. You may think you’re with the love of your life, nothing could ever happen and things are perfect.
I truly hope they are…and stay that way forever, but if they don’t, you’ll be mad AF you didn’t listen to my advice and at least get a few basic things in place .. just in case, with the confidence that you’ll never have to use any of it.
That’s it for today. Get it done.