This Week In Your Wallet: Five Years To Rebound
No news dominated the week like the run-up to last night’s debate.
A close second in the headlines? The split of Brad Pitt and Angelina Jolie. I’ve written in this space before about how divorce is a dissolution of a financial partnership as well as a romantic and emotional one. New research suggests it exacts a tremendous toll.
According to a survey on financial disruptions from TD Ameritrade, it takes Americans nearly five years on average to rebound financially from a divorce, with 33 percent recovering fully. Some 16 percent said they would never again be able to reach their financial goals. A big reason behind that is that they could no longer afford to save as much, if at all. Pre-split, couples were investing an average of nearly $485 a month. Afterward, their monthly contributions decreased to $235, with just 60 percent of individuals (down 17 percent) able to save at all.
One way to protect yourself is to consider a prenup going in. Reports differ on whether Brad and Angelina had one (I’d be astonished if they didn’t), but if you’re tying the knot anytime soon and you — from your earlier life — have significant assets, a business, children or are expecting an inheritance, getting a prenup is a smart thing to do.
Women, Men And Interruptions
Who’s more likely to step on your words — a woman or a man? That, research shows, depends on who you’re talking to. Men talking with females interrupted them an average of 2.1 times in a three-minute conversation, but just 1.8 times when they were speaking with other males, according to a 2014 study from The George Washington University that focused on 40 volunteers (20 male, 20 female). Women were even guiltier of interrupting other women — we stepped on each other’s words an average of 2.9 times. Yet, when women were talking to men, we interrupted just once. How can we turn this embarrassing statistic around? Well, when someone interrupts someone else, it often means what the latter said is being ignored or glossed over. Some women at the White House came up with a new tactic that addressed this, reports The Washington Post. They called it “amplification” — when one woman made a key point in a meeting, others would repeat it and give credit to the originator. Men were forced to recognize the idea and — an added plus — weren’t able to take credit for it.
Time And Money
Time or money? It’s an age-old question, and it’s one we pose to ourselves every day (in fact, we strategized ways to make the most of your time on the latest episodeof HerMoney podcast with productivity expert Laura Vanderkam). When traveling to be with family for the holidays, you might shell out extra cash for flights that allow for more quality time. But, as this New York Times piece mentions, you might opt for a job with a higher salary that cuts down on your free time outside the office. A survey of over 4,000 people showed 64 percent chose money over time.
In fact, neither is necessarily the right choice — it’s all about the value people place on the two resources relative to each other. People who chose money were more likely to focus on not having enough, while people who chose time thought more about how they’d spend it (on wants, not needs — and on people other than themselves). The bottom line? Results suggested people who chose time were happier and more satisfied with life.
The Price Of Caregiving
According to AARP, nearly 44 million American adults are unpaid caregivers — providing help and resources, often for years, for a parent or other older relative. And more than four in five are feeling the financial pinch themselves. Research fromCaring.com shows 82 percent of caregivers are concerned they don’t have enough financial resources to last their disabled relative’s entire lifetime, and only 16 percent strongly believe they are financially secure. Among the troubling statistics in this report, 30 percent aren’t saving at all for their own retirement, and 59 percent haven’t prepared a will.
My suggestion: Try to move the needle on both in the easiest way possible. In terms of saving, making automatic contributions — to an IRA if you don’t have a work-based retirement plan — is the very best way to keep yourself on target. (If you don’t think you have the capacity to save, try a relatively new app called Digit, which will surprise you in its ability to show you that you can.) As for that will? Do it online with WillMaker, which costs about $55 through Nolo.com, or LegalZoom.com, where DIY online wills online wills start at $69. (Just be sure it’s properly witnessed.)
Have a great week,
Jean
