Inspired by original reporting by Meera Raman, The Globe and Mail
For many women in Ontario, divorce marks not only a legal transition but a significant financial reckoning. Particularly in marriages where the husband managed household finances, separation often thrusts women into a rapid journey of financial education and independence. This challenge was thoughtfully explored in a recent Globe and Mail article by Meera Raman, highlighting how divorce can quickly escalate into a crash course on managing money independently.
Understanding Your Financial Reality
Financial literacy remains elusive for many, especially those raised in homes where money was rarely discussed. During marriage, women frequently prioritize caregiving and household responsibilities, with financial planning managed by their partners. When the marriage ends, so does easy access to joint accounts, shared tax benefits, and income splitting—often leaving women financially vulnerable.
Carrie Heinzl, owner of Fairmore Financial Solutions, emphasizes the importance of budgeting: “Budgets are crucial to understanding your finances. Most people think budgets are limiting, but they’re actually very liberating. Knowing exactly what you have coming in and going out helps you make sound economic decisions, both long and short term.”
According to a 2024 Edward Jones survey, only 25% of Canadian women received formal financial education, compared to 35% of men, highlighting a concerning gap that becomes painfully evident during divorce. Women may find themselves without a personal credit history, ill-prepared to independently manage budgets, and burdened with outdated legal documents like wills and beneficiary designations.
Practical Steps Towards Financial Independence
Here are essential steps to build your financial foundation post-divorce:
- Get Real With Your Budget Heinzl advises, “Get real with your budget. If you enjoy a daily latte, budget for it. Omitting regular expenses leads to problems and frustration. Once you realize your daily Starbucks latte adds up to about $195 per month, you might reconsider that habit.”
- Understand Your Financial Position Inventory your assets, debts, income sources, and expenses to establish a clear financial baseline.
- Prepare for Support Payment Uncertainty Heinzl warns that relying on child or spousal support as a primary income source is risky. “Payments might stop due to job loss or non-compliance. Budgeting without these amounts can clearly indicate where to reduce expenses if necessary,” she advises.
- Build an Emergency Fund Aim to set aside at least three months of living expenses. Heinzl suggests, “This safety net offers crucial financial stability if support payments are delayed or stop altogether.”
- Establish Personal Credit If you haven’t already, open credit accounts in your own name to build a solid individual credit history.
- Update Legal and Financial Documents Review and update your wills, powers of attorney, insurance policies, and retirement accounts to reflect your current circumstances accurately.
- Seek Professional Guidance Collaborate with trusted professionals, including family lawyers and financial advisors, to avoid common pitfalls and strategically plan for your future.
A New Financial Beginning
As Raman’s Globe and Mail article highlights, many women successfully transform their financial challenges into powerful teaching moments, educating their children about financial responsibility and independence. With careful planning, divorce can become a pivotal moment for long-term financial empowerment.
Carrie Heinzl offers reassurance for those navigating budgeting for the first time: “Give it time—you won’t master budgeting overnight. Mistakes are part of learning. With adjustments, you’ll soon realize the indispensable value of your budget.”
At Russell Alexander Collaborative Family Lawyers, we regularly witness how divorce, though disruptive, can pave the way for a more informed, independent, and empowered financial future.
With appreciation to Meera Raman and The Globe and Mail for their original reporting and insights into this important issue.