The Five Mistakes Married Women Make

Updated on June 11 2008.

ANNE BORDEN, MOTHER OF two, wasn't particularly concerned in 1999 when her husband suggested she become the family's sole breadwinner. As a corporate executive, she earned a salary of $200,000-plus — more than enough for the Seattle-based family to live on comfortably.

There was more money: Her husband of four years had just cashed in several million dollars worth of Microsoft (MSFT) stock options. That windfall would go into savings, they decided, and the family would live off of Borden's paychecks.

Soon thereafter, a red flag appeared: Borden discovered that her husband had deposited the options proceeds into four bank accounts, only one of which shared her name. When she questioned him about it, he said he would change the single accounts to joint ones when he had the chance. He never did.

In 2002, the couple separated. It was only then that Borden (who asked that we not use her real name for privacy concerns) took a good look at the finances and realized she had very little money of her own. Turns out she didn't even have a claim on the proceeds from the stock options. According to the divorce settlement, 80% of the stock options were considered her husband's individual assets rather than joint property because he had received the grant from Microsoft one month before their wedding.

The couple's divorce was finalized in 2004. Borden left her job in October 2002. Now, she worries about her relatively small retirement account and lack of other savings. "Had I known that money wasn't community property, I would have never let him stay home with the kids and live entirely off of my income," she says. Borden blames herself for not understanding the family finances and letting her ex-husband call the financial shots.

It's a common theme among many women. "The single biggest mistake I see women make is that they acquiesce [the financial decision making] to their spouses," says Stewart Welch, author of "The Ten Minute Guide to Personal Finance for Newlyweds" and a certified financial planner based in Birmingham, Ala. "Once they're out of the loop, they remain uninvolved forever." When one spouse controls the purse strings, the other spouse can be left in a vulnerable position when the marriage ends.

This isn't purely a women's issue, of course. Men can just as easily fall into the same traps. But women are more likely to give up careers to raise children, and are more likely to outlive their husbands, says Steven Kaye, a certified financial planner (CFP) based in Watchung, N.J.

Here are five common financial mistakes married women make — along with some advice on how to avoid them.

1. Mistake: Handing Over the Purse Strings
"Ignorance is not bliss," says Patricia Powell, a CFP based in Martinsville, N.J. By not engaging in the family finances, women set themselves up for potential hardships. Powell says she has worked with at least two clients who managed their finances perfectly well while they were single, only to file for bankruptcy after they got married because of their husbands' premarital debt and extravagant spending habits.

Solution: Pay Attention to the Household Finances
Both partners should attend the meetings with insurance agents, accountants, financial planners and lawyers, says Watchung, N.J.-based Kaye. Women should also look over monthly bank statements and credit-card bills. And Kaye recommends that couples make a list of all bank and brokerage accounts and insurance policies and keep it with other important documents, such as wills and medical directives.

2. Mistake: Losing Your (Financial) Identity
When Elizabeth Lundin (who asked that we not use her real name), now 33 years old, got married six years ago, her husband offered to take over the couple's finances. She happily agreed. The couple merged all of their bank accounts, and Lundin even gave up her individual American Express card and started using a shared credit card. Two years later, when the couple decided to divorce, Lundin learned that the couple's credit card was actually held in her husband's name, and that she was simply an authorized user. Her name was taken off that account, and she let many months go by before trying to secure credit in her name. When she tried, she found that her lack of an active credit history worked against her. She was offered only high-rate cards with small lines of credit.

According to Craig Watts, spokesman for Fair Isaac Corporation, the company that helps generate consumer FICO scores (the most common credit score used), the credit bureaus won't calculate a FICO score for an individual whose credit history has been inactive for six months or longer.

"[Recent] college graduates had an easier time securing credit than I did," Lundin says. She says it took her two years to get a card with a competitive interest rate and sizable credit line.

Solution: Maintain Some Individual Accounts
"You always want to maintain your own credit identity," says Lisa Caputo, president and CEO of Women & Co., a division of Citigroup. She recommends that couples keep three bank accounts (his, hers and ours) and maintain separate credit cards.