Women Empowering Themselves: A Financial Survival Guide-Book Excerpt

By Hollis Colquhoun –

Money is such an elemental aspect of life and yet so intertwined with emotion and ego. Almost all of the female clients I have counseled admit they feel uncomfortable or have problems talking to their partner, fiancé, or spouse about money. When a relationship is strained, it is normal for financial issues to become hypersensitive topics. Obviously, having an open and honest financial dialogue is best, but if such communication hasn’t been the norm throughout your relationship, it is pretty impossible to cultivate when everything else is turning sour.

Financial awareness and good money management skills are key components for building a successful life alone or with a partner. You cannot survive if you avoid the topic of money or remain clueless about your finances. Whatever happens in your marriage or relationship or life, you must take the steps necessary to be in control of your financial destiny.

Being in control of your financial destiny is important because:

1. Your financial health is as necessary to your survival as your physical and mental health.

2. Financial awareness and planning in the present will bring you more financial security in the future.

3. If you are not financially in control, then someone else is, and their interests might not be in your best interest.

ADDING TO SAVINGS, FREEING UP INCOME:

Even if you don’t have a paying job, understand that you still have part ownership of the household income.

Just because your husband is the moneymaker, that money is not solely his to control. You and your husband have built an economic partnership and in many cases have raised a family together. He wouldn’t be able to work full-time, take care of the children and manage the household all on his own without creating more expenses, so you make an economic contribution to the marriage by performing tasks that don’t cost the household anything. You create income, not only by performing tasks he’d have to pay for, but by freeing up money to pay for other expenses or to put into savings.

Your combined household income, even if you don’t have a job for pay, is an important part of your personal income calculation and worth. To illustrate this value, make a list of the tasks you perform regularly that result in monthly cost savings for the household:

YOUR JOBS AVERAGE OUTSIDE COST (Monthly)
Example Yours

• Transportation 100
• Housekeeping 200
• Cooking 400
• Laundry 200
• Tutoring 100
• Elder Parent Care 200
• Other

TOTAL
(After-tax dollars) $2000

Using these sample figures, in order to have the $2,000 per month to pay someone to do these tasks, you would have to earn approximately $2,500 per month before taxes. In this case your efforts would result in cost savings equivalent to earning $30,000 per year. You can make your own chart and add tasks to calculate your monthly cost savings contribution. Even if you don’t have a paying full-time job, you provide real economic value to the household by lowering expenses, and therefore have real personal economic worth in the relationship. You need to recognize and embrace this value.

MANAGING YOUR DEBT AND CREDIT PROFILE

Whenever you are extended credit or take out a loan (Including co-signing a loan with someone else), you are borrowing money and are responsible for paying it back. Many married couples jointly own their home and cars and are also jointly responsible for the mortgage and car loans. This is the highest priority debt because if it isn’t paid, the lender has the authority to take back the property.

DANGER: When you co-sign for any loan, secured or unsecured, you will be responsible for paying back the loan if the other person fails to make the payments. Many clients co-sign for their children’s car or student loans and end up holding the bag. Resist the temptation.

In the case of credit cards, there can be individual or joint accounts and an authorized user on either of these accounts. The authorized user is allowed to have a card and use it up to the limit, but is not responsible for paying back the debt. Only the owner of the account is legally responsible.

When you’re tracking and controlling your budget, you and your husband’s credit card use has to be closely monitored, particularly if you have joint cards  or your husband is an authorized user on your account.

Whenever you apply for or get credit, it appears on your credit report. There are three major credit bureaus:

Experian, Equifax, and TransUnion.

Your credit report contains basic identification information, public records (like crimes, judgments), collection items (old unpaid debt), and your current outstanding debt. The report shows how well you have handled the amount of debt you owe (both individual and joint), whether you are near or over your credit limit, your monthly payment history, the different Types of debt you have and how often you have applied for more credit.

All of these factors are evaluated based on the Fair Isaac Corporation rating system, resulting in a FICO score, a measure of your credit risk. This score can range from 350 (horrible) to 850 (perfect). It will determine whether you will get approved for a loan and what interest rate you will be charged. Your monthly payment history and credit availability are the two most important components of your score. So, if you manage your debt well, make regular monthly payments, and pay down the balances quickly, you are less risky in the eyes of the lenders, you will have a good FICO score and will qualify for a lower interest rate loan.

Reviewing your statements each month is a very important discipline for several reasons. The first is to make sure there isn’t any unauthorized activity. You have 60 days after receiving your statement to report fraudulent or inaccurate account activity to the credit card company and you won’t have any liability if their fraud department investigation backs up your claim. Make sure you follow up any conversation with a letter and keep a copy for your files.

DANGER: Recently, the credit card companies have become more strict about their definition of “fraudulent.” If your husband or boyfriend is not an authorized user but has access to your cards because you keep your wallet or purse in plain sight on top of your bedroom dresser, he could use your card or order something over the phone with your card information. It would be very hard for you to prove that this use was “unauthorized,” and you would be responsible for the charge. Keep your credit cards and wallet in a safe place at all times. Do not give out your bank or credit card account information to anyone who isn’t an owner or authorized user.

Secondly, you want to know that your charges are being reported accurately and if an authorized person uses the card, you want to know what they have charged, since you are ultimately responsible if they don’t pay.

Thirdly, you need to read each monthly statement to understand the rates and terms of the card.

Everyone is allowed to get their credit report for free from each of the three main credit bureaus, once per year.

You can get your credit report through the mail or online at annualcreditreport.com. It is incredibly important to know what is on your report. If you have a joint account with your husband or boyfriend, or he is an authorized user and you’re having problems in your relationship, you want to be aware of your account activity and liability.

Author and financial self-defense expert Hollis Colquhoun knows firsthand the struggles women go through in divorce. An Accredited Financial Counselor who worked 20 years on Wall Street, Hollis has counseled thousands of clients, most of whom were women going through the difficult stages of divorce, needing sound financial advice. Her book, Women Empowering Themselves: A Financial Survival Guide, is a concise, pocket-book manual that teaches women how to take charge of their finances. Hollis, who holds black belts in Karate and Tae Kwon Do, uses martial arts principles to teach women to protect themselves personally as well as financially.
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