Ruth Hayden on money and divorce

Ruth Hayden
Ruth Hayden is a nationally recognized financial consultant, educator, and author.
Photo courtesy of Ruth Hayden

Personal finance guru Ruth Hayden was back on The Daily Circuit Friday talking money and divorce. About 1 in 10 marriages end before the five-year anniversary and 1 in 4 don't make it to the 10th anniversary. When a marriage does end, financial struggles often make the process more challenging and painful.

What are the best strategies for dealing with the inevitable financial bumps in the road? And, if your marriage does end, what are some steps to take to ensure that all parties can protect their assets and not end up in financial ruin?


Women need to be more prepared for the possibility of divorce. According to the U.S. Census Bureau, a woman's lifestyle drops 37 percent after a divorce. A man's lifestyle goes up 63 percent. "Women have to think about it more because of the damage financially and the vulnerability it puts them into and many times children," Hayden said.

Prepare for divorce like you'd prepare a will for your death. Hayden said couples often don't discuss the possibility of divorce during the start of a marriage because they think it's a divorce wish.

Create a plan at the beginning of the partnership. "Some kind of agreement where we say, 'We're going to do our best to make this work, but if it doesn't we want both of us to walk out of here whole," Hayden said. "And I think it's done in love, where we say we don't want either one of us to be vulnerable and we want to make sure that if we have a fight, we already know what will happen if we don't make it so nobody has to get into fear."

Keeping the house isn't always the best decision. "Five years later, women say that's the biggest mistake they made," Hayden said. If the house is a struggle to financially keep up with two incomes, don't get stuck drowning in a mortgage.

Keep your retirement money. There is a way to split retirement and pensions through a Qualified Domestic Relations Order. Women often take the cash value of their retirement, Hayden said, and use it for cash flow instead of adding it to a new retirement account.

Think about the tax ramifications of your assets and forecast their value over time. "All assets are not created equal," Hayden said. "We have to look at the quality of the asset; we have to look at the tax ability of the asset."

How did divorce affect your finances? Join the live chat.